While residents of some countries have the freedom to leave their assets to any entity they choose, or at least to disinherit a forced legal heir under some circumstances, Switzerland has very strict laws on succession.
When a person dies without having created a will, their assets will be divided according to the rules governing intestate succession. This type of succession is common because many people die unexpectedly, without have gone to the trouble of making a will.
If the deceased leaves a will, assets will be distributed as per the rules of testate succession. This means that the division of assets follows the stipulations presented in the person’s testament. It is very important, however, that a will abides by the rules of compulsory shares, or it may be declared invalid.
In Switzerland, your relatives are entitled to a compulsory share of your assets when you pass on, regardless of whether or not you like them or even know them. If you do not leave a will, your assets will automatically be distributed as per intestate law. But leaving a will gives you the freedom to designate a portion of your assets to entities of your choice.
The examples below should give you a pretty clear overview of which relations qualify as legal heirs and what part of your inheritance will go to whom. Because exact circumstances and family situations vary, it is worth seeking help from a lawyer or estate planning consultant, especially if you actually own a fair number of assets.
Examples of intestate succession (you die without leaving a will):
1. You are married but do not have any children or living parents: Your spouse inherits 100% of your assets.
2. You are married and have children or grandchildren, but no surviving parents: Your spouse inherits 50% of your assets. The other 50% is divided equally among your children.
3. You are not married but have children or grandchildren: 100% of your assets go to your children, grandchildren or their descendants. Assets are divided evenly between children.
4. You are married and your parents are alive, but you have no children: 75% of your assets go to your spouse, 25% are divided equally between your parents.
5. You are married and have living siblings (or nieces and nephews), but no children or living parents: Your spouse inherits 75% of your assets, while 25% is divided evenly among your siblings.
6. You have no spouse, children, grandchildren or living parents, but you have siblings, nephews or nieces: 100% of your assets are divided equally among your siblings.
7. You have no spouse, children or grandchildren, but you have living parents: 100% of assets are divided equally between your parents.
8. You have no spouse, children, grandchildren, parents, siblings, nieces or nephews, but you do have grandparents, aunts, uncles, cousins (and their descendants): 100% of your assets are divided up between your surviving legal heirs.
9. You have a girlfriend, boyfriend or registered civil partner: Your partner is not entitled to any of your assets. All assets will be distributed as per the first 9 points, unless you leave a will.
10. You have no near relatives at all: 100% of your assets go to the municipality or the canton.
If you do not have any surviving legal heirs, it is imperative that you create a will. Unless you want to donate your assets to your municipality or canton, making a will is the only way to ensure that your assets go to a person or cause which you care about.
On the other hand, if you have close family who are still alive, you will have to leave part of your assets to close relatives even if you do not want to. This compulsory share must be accounted for when you create your will, in keeping with the laws on testate succession.
Examples of testate succession (you make a will before you die):
1. You have a spouse, but no children: You must leave a minimum of 50% of your assets to your spouse. The other 50% may be left to entities of your choice.
2. You have a spouse and children (or grandchildren): You must leave 25% to your spouse and 37.5% must be divided equally between your children. The remaining 37.5% is yours to leave to whomever you wish.
3. You have a spouse and living parents, but no children: Your spouse is entitled to 37.5% of your assets. Your parents are entitled to 12.5%, which will be divided evenly in the case of two living parents.
4. You have a girlfriend, boyfriend or registered civil partner: You are not obligated to leave any of your assets to your partner.
5. You have children, but you do not have a spouse: Your children and grandchildren have a right to 75% of your assets, which must be divided equally between them. The remaining 25% can be distributed as you choose.
6. You have living parents, but no spouse or children: You must leave a minimum of 50% of your assets to your parents. If both parents are alive, this amount must be divided equally between them (25% each).
7. You do not have a spouse, parents, children or grandchildren: You have full command over what happens to 100% of your assets after you die.
Swiss succession law: Room for flexibility?
Swiss law allows for special succession planning using contracts of succession. These contracts must be legally authenticated, and make it possible for a legal heir to renounce their right to your assets. Heirs can also agree to divide assets unequally.
For example, your spouse may agree to relinquish their share of the inheritance in favor of leaving the entire sum to the children. Children who are financially well-off may decide to claim a smaller share of an inheritance and leave a larger share to a sibling who is less well-off.
It is important to note, however, that if you give up your rights to an inheritance, the relinquishment may hold true for your children and their descendants as well. Once a contract of succession has been authenticated, it can only be changed with the consent of all affected parties. Make sure to consider all future implications and consult with a lawyer regarding the wording of the contract.
A marital agreement, which is similar to a prenuptial agreement but can be created during a marriage as well, can be used to leave a larger portion of your assets to your spouse by specifying which of your assets are joint assets and which belong to you individually.
When you divorce or legally separate, you forfeit all rights to your spousal compulsory share of an inheritance, because all joint assets are divided at the time of separation. In Switzerland, marital agreements and contracts of succession between spouses are voided by a divorce, unless the agreement makes special provisions for the consequences of divorce.
If you want to leave your assets to your unmarried partner (a girlfriend or boyfriend, for example), the only way to do this is to create a will and designate them as your beneficiary. The same holds true for friends, charities, associations and other entities.
You have every right to give your assets to anyone you choose to while you are still alive. However, you should take care not to make gifts with the direct intention of avoiding compulsory shares. It is also important to know that in Switzerland, gifts which are made during the last 5 years of a person’s life will generally count towards compulsory shares and free assets.
For example, if you gift one of your 5 children and grandchildren 10,000 francs of your 100,000-franc assets and die shortly afterwards, that 10,000 francs will count as their compulsory share (20% of the 50% portion set aside for your children and grandchildren.
This can get complicated if you give gifts above the legal share. For example, if you are divorced but have children and you decide to give your romantic partner gifts worth 50% of your assets, your romantic partner may have to reimburse your children for that 50% if you died less than 5 years later and did not leave a will. If you left the legal free share of 25% of assets to your partner in a will, your partner would have to compensate your children for the remaining 25%.
Inheritances are a complex topic, but thanks to the relative clarity of Swiss succession laws, a lot of the squabbles and litigation processes often associated with inheritances can be avoided.