On 29 August 2018, the Swiss Federal Council presented a proposal for a first partial amendment of Swiss inheritance law. The purpose of drafting the law is the adjustment of inheritance law to new societal forms of cohabitation and making corporate succession regulations easier. Of great practical relevance in the case of estate planning is that the previous mandatory portion claims of the descendants are reduced.

The following shows what effects the amendment of inheritance law will have on already existing wills and inheritance contracts and why these are to be adjusted.

1. What changes for my estate planning arise as a result of the amendment to inheritance law?

The envisaged amendment of inheritance law is anticipated to bring two significant changes:

  • On the one hand, the mandatory portions of the descendants are reduced. This allows a testator to plan his estate more freely and to dispose to a greater extent over his assets, which is important particularly for company succession.
  • On the other hand, a hardship regulation is created for de facto partners who were not considered by the testator.

Although initially discussed, a reduction in the mandatory portion for the spouses was waived.

2. Example 1: Testator with daughter, son and co-habiting partner

Assuming a testator leaves a daughter and a son and co-habits. According to current law, the available quota only amounts to 25% of the testator’s assets, because each of the two children must receive at least 37.5% of the estate. This restricts both the possibility to favour the co-habiting partner as well as to strongly prefer a child to the other.

As a new stipulation, the testator should be able to freely dispose over 50% of his assets because every child will only receive 25% of the testator’s assets as a mandatory part. Accordingly, the following new options arise for the testator:

  • The daughter is most favoured and receives 75% of the assets and the son will be placed on the mandatory part and receives 25% of the testator’s assets; or
  • The son is most favoured and receives 75% of the assets and the daughter will be awarded the mandatory part and receives 25% of the testator’s assets; or
  • The daughter and the son are awarded the mandatory part and receive 25% of the assets and the life partner receives 50% of the testator’s assets.

3. Example 2: Testator with spouse, daughter and son

A testator leaves a spouse, a daughter and a son behind. To date, each of the children of the testator has received at least 18.75% of the estate as a mandatory measure. Accordingly, the freely available quota – the spouse received at least 25% of the assets as a mandatory measure – was only 37.5% of the estate.

The testator should be able to freely dispose over 50% of its assets. The spouse still receives 25% of the assets of the testator as a mandatory measure. However, each of the two children should only receive 12.5% of the testator’s assets as a mandatory measure. Accordingly, the following new disposal options arise for the testator:

  • The spouse is most favoured and receives 75% of the assets of the testator. The daughter is awarded the mandatory part and receives 12.5% of the assets of the testator and the son will also be awarded the mandatory part and also receives 12.5% of the testator’s assets; or
  • The daughter is most favoured and receives 62.5% of the testator’s assets. The spouse is awarded the mandatory part and receives 25% of the assets of the testator and the son is likewise awarded the mandatory part and receives 12.5% of the assets of the testator or
  • The son is most favoured and receives 62.5% of the testator’s assets. The spouse is awarded the mandatory part and receives 25% of the assets of the testator and the daughter is likewise awarded the mandatory part and receives 12.5% of the assets of the testator; or
  • The spouse is awarded the mandatory part and receives 25% of the assets of the testator, the daughter is awarded the mandatory part and receives 12.5% of the assets of the testator and the son will be awarded the mandatory part and receives 12.5% of the testator’s assets. The stepchild/a third party receives 50% of the testator’s assets.

4. In any case: prior dispute under marital property law

It is important not to forget that in the event of a dispute under inheritance law, the dispute under marital property law precedes. Depending on the marital regime, the surviving spouse therefore receives additional assets in advance, for example half of the marital proposal with the marital regime of accrued gain.

Therefore, those who are reviewing their existing estate planning or planning their estate for the first time should also review their existing planning under marital property law or regulate this in future.

5. Legacy of maintenance

A so-called legacy of maintenance under inheritance law is also now to be created. Those who in the event of the testator’s death have lived with the latter for at least five years in a de facto civil partnership are to be able to demand support from the heirs if they were to suffer hardship without such assistance.

The assistance will be provided in the form of a pension. The total amount may not exceed the sum of the pensions that the life partner would receive up to 100 years of age, nor a quarter of the net assets of the testator at the time of death. To safeguard the support claim, the heirs must provide appropriate security.

Those who have lived for a long time in a de facto civil partnership should consider whether they would like to favour their co-habiting partner under inheritance law, if this has not yet been done. If this is not done, there is the risk that the de facto civil partner files claims against the heirs in the event of the testator’s death, for instance, the testator’s own children, if the civil partner’s own asset and income situation is poor.

6. I have already written a will – which law is applicable? The old inheritance law or the amended inheritance law?

The decisive factor is not when a testament was drafted, but when a testator dies.

If a person dies prior to the entry into force of the new revised inheritance law, the old law applies; however, if the person dies after the entry into force of the amendment of inheritance law, the new law is applicable. In addition, this applies irrespective of whether the legal succession occurs or whether a final decision was made prior to the entry into force of the amendment or to when a contract of inheritance was concluded.

7. I have a daughter and a son. Because my son never contacts me, I have awarded him the mandatory portion in my will in favour of my daughter. I have sought advice beforehand and assume that the latter will receive 37.5% of my estate. Does this apply even if I die after the entry into force of the amendment to inheritance law?

No, this probably does not apply. Due to the amendment of inheritance law, it is rather to be assumed that the son only receives 25% of the estate, because this quota corresponds to the intended new mandatory portion law.

However, note that it therefore cannot be prevented that in individual cases delicate questions arise if it can be concluded from certain formulations in a final disposition or an inheritance contract that the testator would have disposed differently under the amended law or if another agreement had been made under these circumstances. It is conceivable accordingly that the son contests the will and presents circumstances showing that, in his opinion, he should only be restricted in the scope of the old mandatory part provision in his participation in the estate.

If the son decides to contest the last will because this is unclear in his opinion, this can lead to many years of court proceedings.

For this reason, it is recommended that people who have already made dispositions in the event of their death should not only use the upcoming amendment to inheritance law to deal with the intended greater testamentary freedom and to benefit from this at any rate, but instead to have existing dispositions in the event of death checked in light of the amendment to inheritance law.

Whether an existing disposition is unclear is to be checked in individual cases. If no dispositions in the event of death are checked, there is the risk that these are interpreted and assessed differently after death as originally presented and there is the threat of court proceedings. This can simply be avoided by clear formulation of wills, and can already be done today with regard to the amendment of inheritance law.

8. I have a son and a daughter. Because my daughter is already wealthy, I have awarded her the mandatory part in favour of my son in a will. Due to the amendment to inheritance law, the mandatory part is lowered further and I assume that my daughter should automatically receive 25% of my estate after the amendment. This tallies with my wishes. Is this correct? Or must I adapt my will?

In principle, the consideration is correct, that the mandatory part of the daughter will only be 25% after the entry into force of the amendment to inheritance law and an existing will be interpreted in this way.

However, it is highly recommended to check the will and adjust it if necessary, because the daughter could otherwise present circumstances as to why in her opinion it was not intended to merely accord her 25% of the estate.

9. The planned amendment of inheritance law is not yet in effect. Can I already write a will with regard to the new mandatory part regulations?

Yes, it is not only possible to already write wills and inheritance contracts today with regard to the new mandatory portion provisions, and this is actually recommended. Otherwise, after the entry into force of the amendment to inheritance law, wills may have to be rewritten.