Interesting facts about inheritance: Important information and legal basis

Inheritance refers to the transfer of financial or material assets from a deceased person (the testator) to an heir. If several people are entitled to inherit, a so-called community of heirs is automatically created. The legal provisions governing inheritance law can be found in the third part of the Swiss Civil Code (ZGB).

A testator can largely determine for themselves which persons or organisations should inherit how much of the estate. However, they must always observe the legal provisions that stipulate a compulsory portion for close relatives, the legal heirs. In any case, it is advisable to draw up a will or inheritance contract.

A will or inheritance contract often specifies who inherits what within a community of heirs. This is referred to as discretionary succession. However, if neither of these documents exists at the time of the testator’s death, statutory succession applies. This must be taken into account when drawing up a last will and testament, particularly in relation to compulsory portions.

This is to ensure that close relatives receive their legal share of the estate. The testator can therefore only determine arbitrary succession to a certain extent. Succession is completely free if there are no direct relatives who qualify as a legal community of heirs (Article 481 of the Swiss Civil Code).

Legal succession: Who inherits how much?

If there is no will or inheritance contract, legal succession applies as regulated in the Swiss Civil Code (ZGB). Various groups of heirs are taken into account, which are divided into the following three categories:

• Descendants (Article 457 of the Swiss Civil Code): The children of the deceased are the next heirs. If there are several children, they share the estate equally. If the children are already deceased, their descendants are the next heirs (i.e. the grandchildren of the deceased).
• Parents (Article 458 of the Swiss Civil Code): If there are no descendants, the parents of the deceased are the heirs. They are therefore second in line and each inherit half of the estate. If the parents are already deceased, the right of inheritance passes to their children, i.e. the siblings of the deceased.
• Grandparents (Article 459 of the Swiss Civil Code): The grandparents come third if neither relatives of the first nor second degree can claim the inheritance. Here, too, their descendants are beneficiaries if the grandparents of the deceased have already passed away (i.e. uncles, aunts, cousins of the deceased).

Spouses and registered partners are also taken into account in inheritance law (Article 462 of the Swiss Civil Code). They receive half of the estate if there are descendants. If there are descendants, they receive three quarters of the inheritance. If there are no direct descendants or relatives of the parental line, spouses and life partners inherit the entire estate of the deceased.

Special case: Cohabiting couples are not considered legal heirs. These are couples who live in a marriage-like relationship but are neither married nor registered as life partners.

What happens if there are no heirs?

If a person dies without having clearly settled their estate, statutory succession applies. However, if the deceased person has no relatives, an attempt is made to locate any unknown heirs by means of a public notice (Article 555 of the Swiss Civil Code). This is initiated by the municipality in which the deceased person was resident. This is done by means of a public announcement giving those affected one year to come forward as legal heirs.

If no heir comes forward by the deadline, the inheritance falls to the canton of residence or the competent municipality (Article 466 of the Swiss Civil Code).

Drawing up a will is not mandatory, but it can be useful in many situations. In principle, any person of sound mind aged 18 or over can draw up a will. This can be done without the involvement of a solicitor or notary, provided that the formal requirements are met. The contents of a will can be changed by the testator at any time. There is no joint will for spouses, so every person who is married or in a civil partnership should draw up their own will.

Tip: A will can help to avoid inheritance disputes. It also gives you the assurance that your assets will end up in the right hands. It is particularly advisable for unmarried couples to draw up a will. It should be noted that a will can be used to bypass the order of succession, but not the statutory share claims. These can only be excluded by an inheritance contract signed by all parties involved.

What are compulsory portions?

In most cases, the testator cannot freely dispose of their entire estate. If there are descendants, a spouse or a registered partner, they are entitled to a compulsory portion by law. This is regulated in Article 471 of the Swiss Civil Code.

The compulsory portion is calculated as a percentage of the value of the estate. In addition, the amount depends on how many other beneficiaries of compulsory portions are to be taken into account. The compulsory portion is half for both descendants and the spouse or registered partner.

The amount remaining after deduction of the compulsory portion from the estate is referred to as the free quota. The testator can dispose of this freely.

Special case: Loss of the compulsory portion in the event of divorce or dissolution of a registered partnership

If the testator dies during pending divorce or dissolution proceedings without a final judgment having been issued, the surviving spouse or registered partner loses their claim to a compulsory portion under Article 472 of the Swiss Civil Code (ZGB) if

• the proceedings were initiated or continued at the joint request of the spouses or registered partners;
• the spouses or registered partners have been living separately for at least two years.

Can the right to a compulsory portion be circumvented?

In principle, the compulsory portion is firmly established in the Swiss Civil Code and cannot be revoked by a will. If the legal heirs are not named in the will, payment of the compulsory portion can be obtained by means of an action for reduction.

Special case: premature disinheritance

However, there are some exceptional cases in which the testator can withdraw the compulsory portion. According to Article 477 of the Swiss Civil Code, these are the following cases:

• Regulation in the inheritance contract: If the compulsory portion is suspended within the framework of an inheritance contract, this constitutes a waiver of inheritance. Such a contract must be signed by both the testator and the heir concerned.
• Penal disinheritance: This can occur if the heir has committed a serious crime against the testator or a person close to them, or has grossly neglected their family obligations.
• Preventive disinheritance: This form of disinheritance can only be applied to descendants who are in a difficult financial situation (e.g. due to gambling addiction or high debt). This prevents the estate from falling into the hands of any creditors.

The reasons for disinheritance must be valid and comprehensible and must be recorded in the will. If necessary, the heirs concerned can contest such a provision. For example, it is not possible to disinherit a legal heir simply because the testator does not like their lifestyle. In the end, there is always an individual assessment of the situation, for example by a lawyer or in court (Article 479 of the Swiss Civil Code).

Testators have the option of transferring assets or property to their heirs during their lifetime. Popular options include gifts or advance inheritance payments. Mixed gifts are also possible, whereby the testator sells a property to their heirs at a price well below market value, for example.

Tip: Regardless of which of these options you choose, you should always observe the obligation to equalise under Article 626 of the Swiss Civil Code. In the case of gifts made no more than five years before the testator’s death, equalisation may be demanded. In the case of advance inheritance payments, the obligation to compensate is provided for from the outset, and even in the case of mixed gifts, the recipient must compensate for the difference. If the testator does not want the recipient to have to compensate in the event of inheritance, they can stipulate this in writing. However, even in this case, compulsory portions and any obligations arising from inheritance contracts must be observed and complied with. It is advisable to seek legal advice to ensure that your gifts are legally valid and do not disadvantage the heirs concerned.

Is inheritance subject to tax?

Inheritance is generally subject to tax. Inheritance taxes are regulated at cantonal level and must be paid by the heirs. In many cantons, close relatives (especially direct descendants and often also the spouse) are exempt from inheritance tax. Whether tax is payable and, if so, how much, depends on the following factors:

• Relationship to the deceased
• Amount of the inheritance
• Place of residence/canton
• Amount of the tax-free allowance

Can an inheritance be renounced?

Renunciation of an inheritance: According to Article 566 of the Swiss Civil Code, both legal and appointed heirs have the option of renouncing an inheritance. This is particularly advisable if the deceased was insolvent and it is assumed that the inheritance will entail debts. The renunciation must take place within three months of the heirs first learning of the testator’s death (Article 567 of the Swiss Civil Code). The renunciation can be made in writing or verbally to the competent authority (Article 570 of the Swiss Civil Code).