Should I make a Will?
Generally, yes. Wills allow you to plan for your future and the future of your family. Doing so will often eliminate language ambiguities and will usually make it cheaper, and quicker, to deal with the administration of your estate. If you do not make a Will, all the property in your estate will be distributed in accordance with default rules, which may not reflect your wishes.
Any existing Will that you have may be fully compliant with, for example, English law in both its words and in its final execution. However, it may fail, in whole or in part, because it conflicts with the laws of Switzerland and/or another country where you have assets or are residing. Furthermore, there may be a tax bill (or a bigger one) if, for instance, a tax credit or a spouse exemption is found not to be available.
What if I have assets in the UK and in Switzerland?
If you are British, but living in Switzerland, the succession and tax laws of both countries may compete for your estate, with potentially unwanted consequences. Unlike the UK, Switzerland has forced heirship rules under which any asset that you own is passed in a fixed portion to near relatives, usually spouse and children. Also, unlike the UK, Switzerland has rules dealing with the distribution of assets which form part of the applicable matrimonial property regime, which bite before the application of Swiss succession law.
Foreign nationals resident in Switzerland can usually override the application of Swiss succession law by Will or an inheritance contract. Swiss citizens do not have a similar choice of law. If you are a British citizen resident in Switzerland, then Swiss law entitles you to elect for your home succession law to apply, potentially giving you complete testamentary freedom and to minimise potential conflicts. However, if a foreign national dies in England and leaves Swiss assets, English law may lead to Swiss law being applied and create practical difficulties as well as complications for UK inheritance tax planning.
For those with a citizenship of an EU Member State bound by the EU Succession Regulation (the UK is not bound by those rules) or spend time regularly in or have assets located in a bound EU Member State (e.g. France, Italy, Spain), it is particularly important to ensure that any choice of law election for Swiss law purposes is consistent with the rules of the EU Succession Regulation.
The interrelationship between the various succession rules means that in certain cases specific Will drafting is required in order to extract the maximum benefit.
What if I am unmarried but cohabiting with my partner in Switzerland?
The rights of cohabitees are not specifically protected by Swiss law and, as such, would need to be expressly named in a Will.
What if we have minor children living in Switzerland?
Broadly, in the event of death of both parents a guardian must be appointed. When making its determination, the relevant cantonal authority tends to give preference to a suitable close relative of the child. Named guardians in a Will usually assist in speeding up this process.
Will the bank rely only upon a death certificate to release or transfer assets?
No. Swiss banks and financial institutions need to identify your heirs and determine their rights of inheritance before releasing the assets. This is usually the case even if the bank account is jointly held.
In order to gain access to these assets, the personal representative often needs to submit to the bank a series of documents proving the death of the deceased and the powers conferred on the personal representative by virtue of law (i.e., a death certificate, grant of probate, certificate of inheritance). The relevant documents must also comply with some formal requirements confirming their authenticity and validity.
And what about any Swiss real estate?
Where the estate includes real estate in Switzerland, special advice should be sought to avoid difficulties in dealing with the relevant Swiss Land Registry, and to take into account the provisions of the Swiss Federal Statute on Acquisition of Property by Non-resident Aliens (Lex Koller).
Swiss law restricts the acquisition of real estate by non-Swiss nationals. Swiss resident EU/EFTA nationals are not subject to any restrictions. A Lex Koller permit is required for the acquisition of a holiday home by non-Swiss residents. Non-EU/EFTA nationals with a permanent residence permit (C permit) are usually not subject to Lex Koller restrictions. A holiday home inherited by family members will usually not be subject to the Lex Koller permit requirement but this will need to be checked.
Will the arrangements be tax efficient?
If you are from the UK (or have spent a significant amount of time there), your entire worldwide estate may be liable to UK inheritance tax, regardless of your place of residence or nationality at death. If you are living in Switzerland, your canton may also seek to tax your estate. To mitigate this conflict, there is a double tax treaty between the UK and Switzerland which needs to be carefully considered when drafting your Will, to ensure the best possible outcome for your family.
Our expertise in Geneva and Zurich
Offering integrated English and Swiss law and international tax advice through our bilingual lawyers, Charles Russell Speechlys is uniquely placed to advise individuals and families moving to and from Switzerland as well as international civil servants working with intergovernmental organizations (IGOs). We also advise on all issues relating to the administration of an estate in the UK and Switzerland.