Inheritance law reform in Switzerland: what do I need to know?

Rights to “reserved shares”

In the eyes of the current law, descendants, surviving spouses or registered partners and, to a certain extent, fathers and mothers are recognised as heirs and are entitled to a reserved share. Simply put, this means these “heirs” cannot be disinherited, as they will receive at least a share of the estate (or more depending on the terms of the will).

2023 will bring more flexibility to testators as legislators reduced the reserved share of descendants to half of their inheritance rights (as opposed to all) and they have totally abolished the reserved shares of parents. That’s not to say that parents lose their status as legal heirs but when the law comes into force, their right to a reserved share will cease. In the case of a surviving spouse or registered partner, reserved shares remain as they were.

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In case of divorce?

During divorce proceedings, spouses currently remain heirs to each other until the divorce is finalised². Although a person can change their wishes to unilaterally limit the rights of their future ex-spouse, the latter will receive, at the very least, their reserved share if the divorce is not yet finalised.

The new law sets out two changes in the context of divorce proceedings³. Under certain conditions, a future ex-spouse can lose their status as an heir entitled to a reserved share, as well as inheritance benefits arising under other legal acts such as inheritance agreements or marriage contracts.

In such cases as these, it must be noted that, the future ex-spouse only loses their reserved share and not their legal right to inherit. If someone does wish to remove their future ex-spouse as an heir, they would have to make testamentary provisions, otherwise the future ex-spouse will remain a legal heir until the divorce is finalised.

Clarifying controversy

The reform of this inheritance law has provided an opportunity to clarify certain controversial points:

• Shares that have been gained via a marriage contract or an agreement on assets in the estate will now be deemed an inter vivos⁴ gift. However, this additional share must be taken into account when the reserved shares are calculated and, depending on the result, it could be reduced. This does not apply to any common children, who cannot make a claim under this rule.
• The changes also clarify that benefits under restricted 3a pension plans⁵ should not be treated differently whether they are paid by a bank or by an insurance company. The beneficiaries are entitled, in their own right, to receive benefits directly from these entities. However, these benefits are added to the estate for the calculation of the reserved shares and may be reduced.

Review of existing plans

From 2023, the new provisions will simply replace current law. Thus, given this new law doesn’t contain any transitional provisions, we recommend that testators re-assess their current estate plans to check whether their plans are still relevant. If this isn’t the case, testators should review and modify their legacies and take advantage of the greater flexibility the new law gives them. 

What else to look out for?

Other statutory changes are being considered in Switzerland. There is a second reform of inheritance law to include more technical aspects that aspires to make it easier to pass on companies; a revision of the law on private international law of inheritance; and a law on trusts.

Finally, it’s fair to say that current reform is a step towards modernisation but it only deals with civil issues. It does not have an impact on tax.

¹ A reserved share is the minimum share of the legal estate for certain heirs
² The same applies to registered partners, who remain heirs until the registered partnership is dissolved.
³ The same change also applies to registered partners, in the context of proceedings to dissolve the partnership.
⁴ Latin translation: “between the living”. Referring to a transfer or gift made during one's lifetime,
⁵ 3rd pillar 2020: Maximum contribution, payments and withdrawals for residential property - www.ch.ch

Points of note:

• Legal share: share of the estate accruing by law to the legal heirs
• Freely disposable share: residual share of the estate after all the reserved shares have been allocated