With the reduction of compulsory shares, the new inheritance law, enforceable as of 01 January 2023[i], paves the way for more flexibility and freedom for testators as per succession planning. In other words, with the adoption by the parliament of the revision of existing laws back in 2020, the new law is set to grant more leeway to testators as to disposition of larger share of their estate.
In a nutshell, the main changes include the following:
- reduction of compulsory share for direct descendants to 50%;
- abolishment of compulsory share for parents;
- an additional option for married couples in ongoing divorce proceedings to disinherit one another prior to the final decree being rendered;
- exclusion of pillar 3a savings from the mass of the estate;
- prohibition of donation in inheritance contracts, except for cases where there may be an explicit consent of all contracting parties.
In the context of divorce proceedings, until recently a spouse’s claim to inheritance and a compulsory share would only be void with the final decree having been rendered.
Moreover, it is decisive as to whether a last will (testamentary disposition), respectively an inheritance contract is drawn up or not. In case of a last will, the legal heirs’ compulsory share will now be reduced by half, amounting to one quarter of the total estate in question. The compulsory share of a surviving spouse or registered partner would nevertheless remain the same, i.e. at one quarter of the total estate.
In the absence of a testamentary disposition, on the other hand, share division based on statutory succession shall remain unchanged, i.e. 50% entitlement for surviving spouse, respectively 50% for legal heirs.
The right of usufruct has also been amended. Simply put, usufruct is the right of direct offspring to defer the use of their inherited assets to the benefit of the surviving spouse. This spousal benefit will be expanded in that the surviving spouse may now be granted full ownership of 50% of the estate instead of 25%, and accordingly the remaining 50% of the estate can be allocated to usufruct.
Cohabiting partners, will nevertheless still have no statutory right to inherit from their partners. Any preferential treatment of cohabiting partners must continue to be regulated in testamentary dispositions or inheritance contracts.
Relevantly, corporate succession[ii] in family businesses is set to undergo a simplification revision. This includes provisions on valuation of companies and the right to allocate a business to one heir based on a judicial decision, among other things.
Given a potential cross border element of some inheritance cases, amendment of the international succession angle of the Swiss federal act on private international law is also underway[iii], which would in principle ensure conformity between the Swiss law and the EU Succession Regulation (No. 650/2012).