INHERITANCE LAW
REVISION OF THE INHERITANCE LAW, PART 1
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.
What are the most important changes as of January 1, 2023? Here follows an overview:
Parents are no longer protected by compulsory portions. The compulsory portions of the descendants are reduced. The available quota is at least half of the estate.
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.
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. 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.
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.
Spouses may agree in prenuptial agreements to allocate more than half of their share of the surplus to each other. The inheritance-law consequences of such favors are regarded as inter vivos gifts.
The order of abatement is clarified.
The law used to be liberal regarding property dispositions after the conclusion of an inheritance contract. Lifetime gifts were controversial. Without a prohibition of gifts, the testator’s intention to cause damage must have been proven. 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.
Benefits from tied personal pension plans payable on death – whether pillar 3a as bank savings or pension insurance – are included in the estate. They must be added to the testator’s assets when calculating the statutory compulsory portions and are subject to reduction (aka abatement).
A legal claim to support for unmarried persons in cohabitation was discussed and deleted without replacement.
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.
Check your existing estate documents (e.g., will, inheritance contract, prenuptial agreement).
Reflect, seek advice and plan your estate.
Three steps to passing on values and assets while preserving family peace.
The time is winding down. Check-up your existing estate planning documents.
A check-up should be done for existing estate planning documents (e.g. last will and testament, contract to will, combined marriage and inheritance contract) preferentially before January 1, 2023, when the first part of the revised inhertiance law enters into force.
Peaceful transfer of assets or inheritance dispute?
Equal treament, oppenness and transparency or abuse of power and humiliation? How would you like to be remembered?
You are writing your will today. Which law will apply?
Will the inheritance law that is (still) in force today or the new revised law that will apply as of January 1, 2023, be applicable? It depends on the date of death.
Are you allowed to give away your assets despite an existing contract of inheritance?
From freedom of bestowing to a ban on gifts and donations. Currently, you are free to make gifts, but in the future, under the revised inheritance law, there will be a fundamental ban on gifts and donations. This restricts you. Don’t become a puppet on a string: provide for clear reservation clauses (modification and gift reservations)!
Should your saved assets ultimately benefit your descendants? Consider protective clauses.
A married couple with joint descendants may leave most of the assets to the surviving spouse. Will the surving spouse remain single, or remarry and have more children? Will he or she be taken advantage of or influenced? Ideally, the joint descendendants will benefit from all the assets still availabe. As it is unclear whether these consequences will occur, it may be wise to protect your offspring.
Marriage contract surplus allocation and their treatment under the inheritance law.
Spouces may agree on a survivorship clause by prenuptial or post-maritial agreement. Art. 216 CC tolerates a special right of inheritance.
Pending divorce proceedings and revised inheritance law.
You heart is broken.You are getting a legal divorce. Can your spouse inherit you?
Benefits from tied (private) pension (pillar 3a) and revised inheritance law.
A policy holder may designate a specific person as beneficiary and thus change the designated order by written delcaration. The beneficary will receive an amount in the event of the testator’s death. How are these benefits from tied (private) pension (pillar 3a) treated under Swiss inheritance law in the event of death?
Usufruct according to Art. 473 CC (beneficiary of the surviving spouse) and revised inheritance law.
Should the surviving spouse e.g. continue to live in the house and be unable to sell it? The children as owners receive so-called naked property, of which they have nothing until the death of the second spouse.
Statutory share, reduction, action in abatement and revised inheritance law.
If the testator gives too much to someone, the heir entitled to a compulsory share may request a reduction by filing an action in abatement. It is like shortening pants. You take away as much as you can until it fits, or you reduce it to the permissible level.
Revision of inheritance law, reduction of compulsory portion, more options.
Who should inherit your assets? Your estate is like a cake whose pieces you can distribute.
Revised inheritance law (part 1), the reasons behind it and a brief overview.
Are you aware of the most important changes that will enter into force as of January 1, 2023? Take advantage of your options in planning today and review your existing estate documents!