Last will or inheritance contract?

A comparison of the two instruments.

Last Will or Inheritance Contract?

If an individual wishes to draw up a last will, one must choose out of two instruments: the last will and the inheritance contract. But what instrument should be chosen in which situation?

 

Q: What is a last will?

A: A last will is a unilateral testamentary disposition – a declaration in which an individual regulates his/her future estate. The individual disposes himself, without the involvement of a third person and is therefore not bound by the will and wishes of third individuals.

 

Q: In what form should the last will be drawn up?

A: The last will is valid if it is either handwritten from the beginning to the end, dated and signed by the capable individual himself, or if it is publicly certified by a notary.

 

Q: May a last will be amended or revoked at any time?

A: Yes, the last will may be amended or revoked at any time. As a principle, a later last will replaces the existing one if it is not a mere amendment.

 

Q: When is a last will the preferred instrument?

A: Because the last will may be revoked or amended unilaterally at any time, it is primarily chosen for individuals being in a less complex financial situation or as an immediate measure or temporary disposition until a comprehensive estate planning has been completed. Additionally, a last will may be chosen in cases where the life situation of the disposing individual is subject to constant changes requiring flexible adjustment options. Finally, the last will may also be chosen if the disposing individual does not wish to be bound to his/her spouse/registered partner or children but wishes to retain flexibility for future developments.

 

Q: Can a joint last will be made with the spouse/registered partner?

A: A joint last will in which two or more individuals dispose in the same document, each one writing down and signing his/her dispositions individually, is only valid if each disposition can be allotted to the respective author and the free revocability of the respective dispositions is ensured. A so-called joint last will on the contrary, in which the joint dispositions are linked in such a way that the validity of the disposition of one testator stands or falls with the validity of the disposition of the other (often written in "we" form), can be challenged before Court in Switzerland. If binding dispositions are to be made, an inheritance contract must be concluded between the parties. It is highly recommended to seek prior legal advice.

 

Q: How does an inheritance contract differ from the last will?

A: The inheritance contract is a contract between at least two individuals in which at least one of the parties makes binding testamentary dispositions.

 

Q: In what form is the inheritance contract concluded?

A: The inheritance contract must be concluded by the contracting parties before the public notary in the presence of two witnesses.

 

Q: May an inheritance contract be amended or cancelled at any time?

A: Apart from a few cases, an inheritance contract may only be dissolved or amended with the agreement of all contracting parties.

 

Q: When is the conclusion of an inheritance contract recommended?

A: The conclusion of an inheritance contract may be chosen if the parties wish a reciprocal contractual binding, e.g., between spouses/registered partners and common or non-common children. For example, upon the death of the first parent, the children may waive their compulsory share in favour of the surviving parent. Or it may be agreed between the parties that a company or property shall remain in the family of one spouse only.

 

Q: When is there a need for advice?

A: In case of more complex financial situations or a family situation with no children or descendants from different relationships, it is recommended to seek advice from a specialist. The advice whether a last will or an inheritance contract is recommended shall be sought at an early stage and all parties concerned shall be involved, particularly if an inheritance contract will be concluded.

 

Our estate planning and inheritance law team will be happy to offer you and your spouse/partner or your family an initial, inexpensive information meeting of one hour enabling you to familiarize with the basic principles of inheritance law. Thereafter, we gladly advise you on all matters relating to the drafting or amendment of last wills and inheritance contracts, which can be notarized directly in our in-house notary's office in Zug. We look forward to hearing from you.

April 2021| Authors: Alexandra Geiger und Luzia Wojahn

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