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Glossary

Family Foundation

The Family Foundation is a foundation under Swiss law that dedicates assets to a family. Under Art. 335 para. 1 of the Swiss Civil Code (ZGB), its purposes are exhaustively defined. Permitted are covering the costs of education, of equipment or of support of family members, as well as similar purposes. Pure maintenance or enjoyment foundations that finance the general living costs of a family are not permitted, because Art. 335 para. 2 ZGB prohibits family entailments (Fideikommisse). A family foundation pursuing an impermissible purpose is therefore void.

At a glance

01

Art. 335 para. 1 ZGB allows only purposes such as education, equipment, support or similar purposes, not general living costs.

02

Art. 335 para. 2 ZGB prohibits the creation of family entailments (Fideikommisse); pure maintenance and enjoyment foundations are therefore not permitted.

03

A family foundation with an impermissible purpose is in principle void, but may under certain circumstances be reinterpreted as a permissible foundation.

Frequently asked questions

No. Under Art. 335 ZGB, only purposes such as education, equipment or support tied to a specific life situation are permitted. A foundation that finances general living costs irrespective of a needs situation is regarded as an impermissible maintenance or enjoyment foundation and is void.
It is suited to clearly defined family purposes such as financing education or providing support in times of need. Because of the narrow restriction of purpose under Swiss law, many families also examine other structures for wealth succession. Careful legal clarification is advisable in every case.

Sources: Systematische Rechtssammlung (fedlex), ZGB SR 210, Art. 335