Revision of Inheritance Law: Entry into force of the first part of the inheritance law revision as of 1 January 2023
Inheritance / Succession
In its decision of 19 May 2021, the Federal Council decided that the first part of the revised inheritance law will come into effect on 1 January 2023.
The new law was created in cooperation with Balz Hösly, member of the expert commission of the Swiss Federal Office of Justice for the revision of the succession law.
This article outlines the most important modifications:
1. SMALLER FORCED HEIRSHIP FOR DESCENDANTS AND NO LONGER FORCED HEIRSHIP FOR PARENTS
The most important modification of the new law concerns forced heirship. Some heirs are entitled to a mandatory share of the estate which cannot be withdrawn from them. The mandatory share of the descendants will be reduced from 3/4 to 1/2 of their legal share and the mandatory share of the parents (previously 1/2 of their legal share) will be expunged in full. The mandatory share of the surviving spouse or registered partner will remain unchanged at 1/2 of their legal share.
In other words: if a person leaves a spouse and descendants, he/she may freely dispose of 1/2 of the estate (previously only 3/8). The same applies if a person leaves descendants only (previously only 1/4). If, on the other hand, a person leaves a spouse/registered partner and the parents, the person no may freely dispose of 5/8 of the estate. This means that the testator may in any case freely dispose of at least 1/2 of the estate and may bequest the other half of the estate to an heir in addition or to any third party.
The revised provisions will apply to all successions after 1 January 2023 and will also apply to last wills and inheritance contracts concluded earlier. It is therefore recommended that existing last wills and inheritance contracts be reviewed to ensure alignment with the new law.
2. INCREASED ENTITLEMENT FOR SPOUSE WITH USUFRUCT
Under the current law, spouses with common descendants may assign a maximum of 1/4 of the estate to the surviving spouse as inheritance and 3/4 of the estate (which will go to the common descendants) as a usufruct. As a result of the modifications of the forced heirship rules, it is now possible to allocate half of the estate to the spouse as inheritance and the other half in usufruct.
3. EXPUNGEMENT OF FORCED HEIRSHIP IN PENDING DIVORCE PROCEEDINGS
To date, the spouse or registered partner lost his or her inheritance and forced heirship entitlements only upon a legally binding divorce or dissolution decision. Under the new law, if a spouse or registered partner passes away during a pending divorce or dissolution proceeding, the surviving spouse/partner loses his or her forced heirship if (i) the divorce proceeding was initiated or continued by mutual request or (ii) the spouses have been living separately for at least two years. However, in the absence of a last will, the surviving spouse/partner keeps his or her legal inheritance entitlement until a legally binding divorce or dissolution decision has been issued. Consequently, should the surviving spouse/partner not be entitled to a share of the estate, a last will needs to be written up.
In addition, the new law provides that the spouse or registered partner may no longer make claims under any last wills and inheritance contracts upon the initiation of divorce or dissolution proceedings unless otherwise provided.
4. PROHIBITION OF GIFTS AFTER CONCLUSION OF INHERITANCE CONTRACT
Under the revised law, there is an actual prohibition of gifts after the conclusion of an inheritance contract. Such a legal provision did not exist under the current law. It is now possible to challenge testamentary dispositions or inter vivos gifts – with the exception of occasional gifts – if they (i) are incompatible with the obligations under the inheritance contract and (ii) have not been reserved in the inheritance contract. It is therefore crucial to state in the inheritance contract whether and to what extent the testator may make gifts to individuals. Existing inheritance contracts may therefore be amended.
5. FURTHER CLARIFICATIONS ON LEGAL QUESTIONS
The revised inheritance law provides several clarifications addressing disputed legal questions. This primarily concerns the calculation of the forced heirship in the case of an over-half allocation of the surpluses to the surviving spouse (see Magazine), the order under which lifetime gifts are abated, and payments from the pillar 3a (bank or insurance solutions) which do not fall into the estate.
The modifications of the revised inheritance law will allow testators more flexibility with regard to estate planning. In order to benefit from this new flexibility, we recommend having existing last wills and inheritance contracts reviewed by the MME inheritance law team. We look forward to hearing from you.