Revision of the inheritance law, part 1
Political inheritance law revision, its content and reasons
What does the political inheritance law revision involve? What are its underlying reasons?
Like a compass showing the direction, the law has to cover realities and be adjusted to the trends. Since 1912, circumstances have changed. People live longer, divorces are on the rise, second and third relationships are becoming more common, as is cohabitation with or without children. Such patchwork families are real relationships, without kinship status and without legal inheritance rights.
Due to these diverse family structures, the testator will be able to favor persons (company succession, spouses, life partners, own children, stepchildren, charitable institutions) of his choice more, due to the reduction of the compulsory portions or the increase of the available quota.
Most important changes as of January 1, 2023
What are the most important changes as of January 1, 2023? Here follows an overview:
Forced heirship
Abolition of the compulsory parental share
Parents are no longer protected by compulsory portions.
Reduction of the statutory offspring share
The compulsory portions of the descendants are reduced. The available quota is at least half of the estate.
Usufruct in favor of the spouse
The reduction of the compulsory portions also affects the beneficiary of the surviving spouse with a usufruct: the available quota will now be half instead of a quarter of the estate.
Marital property law and inheritance law during divorce proceedings
Loss of right to claim the statutory entitlement
If divorce proceedings are pending on the demise of one spouse, forced heirship may be avoided if the proceedings were instigated by joint request or continued by joint request in conformance with the rules on divorce; or the spouses have lived apart for a minimum of two years.
Disinherit the spouse
You may make a holographic will and “disinherit” your spouse by withdrawing the compulsory portion. Otherwise, the statutory right of inheritance remains in force until the divorce decree becomes final. IOW, if a testator dies during pending divorce proceedings without leaving a will or contract of succession with different provisions, the still-spouse will succeed him as provided for by statute.
Not raising any claims based on testamentary dispositions
The new rule is that, subject to an order to the contrary, spouses may not raise any claims based on testamentary dispositions (will, contract of succession) after the death of one spouse during divorce proceedings that result in the loss of the surviving spouse’s entitlement to a compulsory portion.
Benefits from inheritance or marriage contracts cease if one of the spouses dies during the divorce proceedings, unless otherwise agreed or ordered.
Benefits from a marriage contract cease
Benefits from antenuptial or postnuptial agreements cease if one of the spouses dies during the divorce proceedings, unless otherwise agreed.
Marriage contract (aka prenup or postnuptial agreement)
Older couples often want to plan for retirement and young couples with offspring and buying a house want to benefit the other in the event of death. This can be achieved, among other things, by concluding a marriage contract. What is often crucial for the surviving spouse is what they receive under marital property law.
Surplus allocation (aka survivorship clause)
Spouses may agree in prenuptial agreements to allocate more than half of their share of the surplus to each other. Consequently, only the testator's personal property may be handed down.
Inter vivos gifts
The inheritance-law consequences of such favors are regarded as inter vivos gifts.
Order of abatement
The order of abatement is clarified.
- acquisitions in accordance with the law on intestate succession;
- bequests;
- inter vivos gifts, namely marriage contracts.
Tied personal pension plan (pillar 3a)
Benefits from tied personal pension plans payable on death – whether pillar 3a as bank savings or pension insurance – are included in the estate.
Addition, abatement
They must be added to the testator’s assets when calculating the statutory compulsory portions and are subject to reduction (aka abatement).
Binding effect of the inheritance contract
The law used to be liberal regarding property dispositions after the conclusion of an contract of succession. Lifetime gifts were controversial. Without a prohibition of gifts, the testator’s intention to cause damage must have been proven.
Ban on testamentary dispositions and inter vivos gifts - if no provision is made for them
However, the revised inheritance law now provides for a fundamental ban on gifts: Testamentary dispositions and gifts inter vivos, except for customary occasional gifts, are subject to challenge if they are incompatible with the obligations under the inheritance contract, in particular where they reduce benefits under the contract of succession, and have not been reserved.
Disregarded
A legal claim to support for unmarried persons in cohabitation was discussed and deleted without replacement.
Come into force, transitional law
From January 1, 2023, the new provisions of inheritance law apply to all deaths occurring thereafter. This happens regardless of when the wills and inheritance contracts were drawn up.
Advice
Check-up for existing estate documents
Check your existing estate documents (e.g., will, inheritance contract, prenuptial agreement).
Check the wording of the compulsory portion
Have you already made a will and planned your estate? – What will apply if you die after January 1, 2023, but left a will from earlier years and only give someone the statutory share? Depending on the wording, your will may need to be interpreted.