Inheritance in Switzerland: Guide for heirs and descendants

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The topic of inheritance is complex and many are overwhelmed when they suddenly inherit higher sums of money or other assets. There are legal regulations that are supposed to regulate the transition. Nevertheless, there are also personal decisions to be made. How should the inheritance be managed and how can it be used or invested wisely? What should be considered when it comes to inheritance tax or debts?

As a testator, this guide will give you an overview of how you can ensure your own wishes. If you have inherited in Switzerland, you are also already prepared for the first steps.

The most important facts in brief

• Under Swiss inheritance law, the right to inheritance is based on the degree of relationship.
• Testators can make provisions that deviate from the law of succession in a will.
• Close relatives are entitled to compulsory portions, which may not be undercut even by their own dispositions.
• Timely planning of the estate benefits testators and heirs.
• Competent asset management helps to maintain and increase the inherited assets.

Parentel system: Swiss inheritance law regulates who inherits and how much

In Switzerland, inheritance law is determined by the parentetel system. If the deceased has not written an official will or inheritance contract, the degree of relationship determines who inherits and how much. With a will or inheritance contract, you can therefore document your will during your lifetime and avoid disputes among heirs.

• Will: You draw up your will yourself and can also amend or revoke it at any time. You are free to formulate your instructions and regulations as long as you comply with the legal limits and, in particular, take into account the compulsory portions. Despite the will, the statutory inheritance law continues to apply due to the compulsory portions.
• Inheritance contract: You and one or more of your heirs can jointly conclude an inheritance contract, which allows you to make decisions outside the legal framework and thus to make individual arrangements. These can only be changed or reversed if all parties agree.

Legal succession according to the parentetel system

The parentetel system determines who is entitled to receive an inheritance and the order in which they receive it. This system is ordered by degree of kinship. If there are no heirs in a particular parentel, the next closest parentel comes into question. Relatives from the third parentel are the last to be entitled to inherit.

• First parentel: This includes direct descendants such as children, grandchildren or great-grandchildren. Children inherit in equal shares. In the case of deceased children, their descendants are entitled to inherit instead.
• Second parentel: These are in particular parents. If they are deceased, their descendants inherit, i.e. siblings and, if applicable, nieces and nephews.
• Third parentel: This is the trunk of the grandparents. Often the grandparents are already deceased and uncles, aunts and possibly cousins take their place. This is provided that there are no heirs within the first two parenteles.

Inheritance entitlement of the spouse

Spouses are always entitled to inheritance by law. The amount of the inheritance claim depends on the other possible legal heirs. In addition, the amount is also influenced by the property law chosen by the spouses.

The surviving spouse is entitled to:

• If there are heirs of the first parentel: 50 percent of the inheritance
• If there are only heirs of the second parentetel: 75 percent of the inheritance.

Determination of the estate

Before the inheritance is divided, the assets are divided according to matrimonial property law. If the spouses have not made any agreements in a marriage contract, the so-called ordinary matrimonial property regime applies. This means that the statutory regulations apply. A distinction is made between four different asset classes:

• The assets brought into the marriage by the wife and gifts (own property).
• The assets brought into the marriage by the husband (personal property)
• Assets acquired by the wife during the matrimonial property regime (acquired property)
• Assets acquired by the husband during the matrimonial property regime (acquisitions).

After this division, the surviving spouse is entitled to the following shares:

• His/her own personal property
• 50 percent of his or her acquisitions
• 50 percent of the inheritance of his deceased spouse

The estate includes the remaining assets.

Spouses have the option of making agreements in a marriage contract that deviate from the legal requirements. For example, community of property or separation of property can be agreed. It can also be agreed in the prenuptial agreement that, for example, the surviving spouse is entitled to all the assets of both spouses in the event of the death of one spouse. However, the undercutting of compulsory shares is only possible in very few exceptional cases. One reason would be a serious crime committed by the heir against the testator.

Inheritance quota – compulsory portions – freely available quotas

When someone dies, the distribution of his or her estate is determined by the surviving relatives. In addition to the spouse, the children are also entitled to a certain compulsory share of the estate. The difference between the legally prescribed inheritance shares and the compulsory shares is the freely available quota, which can be assigned to beneficiaries by means of a will.

The table below provides an overview of the amount of the freely available quota in different family situations.

Heirs left behind…	Statutory inheritance quota	Compulsory part from the estate	Available quota
Descendants (first parentel)	100 percent	50 percent	50 percent
Spouse	100 percent	50 percent	50 percent
Spouse and children	Children 50 percent Spouse 50 percent	Children 25 percent Spouse 25 percent	50 percent
Spouse and parents	Spouse 75 percent Parents 25 percent	Spouse 37,5 percent Parents 0 percent	62,5 percent
One parent and siblings	Parent 50 percent Siblings 50 percent	Parent 0 percent Siblings 0 percent	100 percent

Inheritance tax: The cantons always inherit in Switzerland as well

In Switzerland, the cantons are responsible for determining the inheritance tax. The canton in which the deceased had his or her last residence is responsible. The cantons also decide on tax exemption rules, such as allowances. Inheritance tax is generally payable by the heirs.

Inheritance tax and inheritance tax

Inheritance tax has two forms: inheritance tax and inheritance tax. The inheritance tax taxes all the assets of the deceased without regard to the individual heirs. The inheritance tax taxes each heir’s share of the estate according to his or her relationship (degree of kinship) to the deceased. In Switzerland, only Solothurn and Graubünden still have an inheritance tax. However, the municipalities there can also demand an inheritance tax.

Inheritance tax rates and exemption amounts of the cantons

The different tax laws in Switzerland make the assessment of inheritance tax complex. In general, the tax rate is progressive and certain allowances are taken into account depending on the degree of kinship. Thus, close relatives are entitled to higher allowances than distant ones.

• For spouses, no inheritance taxes are due in all cantons. The same applies for the most part to descendants. Only in Appenzell Innerrhoden, Lucerne, Neuchâtel and Vaud do children have to expect low inheritance taxes of 0.01 to 3.5 percent.
• For parents, the range in the cantons goes from pure tax exemption to a tax rate of fifteen percent. However, there are also tax-free amounts of up to 50,000 francs.
• Depending on the canton, siblings can expect an inheritance tax of up to 23 percent, with allowances of up to 30,000 francs.
• Tax rates for other heirs range from 12 to 49.50 percent, depending on the canton, and there are only small allowances.

Tax on inheritances abroad

In principle, there is a risk that the inheritance will be taxed by several countries. This may be the case, for example, if the deceased person or an heir resided abroad or if an inherited property is located abroad. In these cases, it must be clarified which law applies to the inheritance. In order to avoid heirs having to pay taxes more than once, Switzerland has concluded double taxation agreements with some states in which this is avoided.

Inheritance in Switzerland: the essential steps after death

After the death of a person, the relatives have to deal not only with the mourning but also with the inheritance matters. Those who know the most important points will save themselves some excitement. The following are therefore the essential steps.

• Submitting a will: As soon as you find a will, you must submit it to the authorities. The assessment of authenticity or correct compliance with formal requirements must also be left to the competent official body – this is what the law requires. In this respect, it is safest for the testator to file his or her will immediately with the appropriate office. Depending on the canton, this is the municipal administration, the district court, the inheritance office or the official notary’s office.
• Opening of the will: As a rule, the will is opened by the authorities within one month. This means that the will is read to all heirs present. For the opening, the office invites all legal heirs as well as those appointed in the will. From the day of the opening, many deadlines must be observed, such as the one-month deadline for filing an objection.
• Apply for a certificate of inheritance: This is the legitimation for the heirs. Only with this certificate of inheritance will you, as the heir, have access to the assets. It is applied for at the same authority that opens the will.
• Rejecting an inheritance if necessary: An inheritance does not necessarily have to be accepted. Sometimes heirs decide against accepting the inheritance for personal reasons. Concerns about having to assume responsibility for the decedent’s liabilities if the decedent was overindebted can also be a reason for disclaiming the inheritance. In such cases, the heir submits a written declaration of disclaimer to the court.
• Securing the inheritance: The competent authority is obliged ex officio to take any necessary measures to secure the inheritance. In some cases, this may mean sealing the inheritance, taking inventory or ordering an administration of the inheritance. Sealing means blocking assets and is provided for in cantonal law for certain cases. In particular, if there is no agreement in the determination of the assets, the authority will take appropriate measures.
• The community of heirs: If there are several heirs, they jointly form a community of heirs. Each individual heir has the right to divide the estate. Until the division of the estate, all heirs are joint owners. The co-heirs can exclude the division for a certain period of time. The testator can also exclude the division for a certain period of time in a decree. Likewise, the court has the possibility to postpone a division if this would be extremely unfavorable for the asset at the present time.
• Agreement among heirs or action for partition: There is not always agreement among heirs, particularly with regard to the valuation of the assets. In principle, the valuation has to be made according to the market value, not only in the case of real estate. However, this is a complex procedure, for example in the case of companies. If no agreement can be reached, an action for partition is brought. In this case, the court takes over the objective division. In the end, the community of heirs is dissolved.

Inherited assets: What heirs should pay attention to now

The more extensive the estate, the more diversified it usually is. In addition to financial assets, the decedent may have owned a house, an apartment or even his own company.

Pay particular attention to the following points in relation to the estate:

• Determine assets and debts: In principle, every heir has the legally guaranteed right to receive information about all of the decedent’s assets and debts. If the deceased has appointed an executor in his or her will, the executor is obliged to provide all heirs with comprehensive information regarding the deceased’s assets. Even in the case of unclear property circumstances, heirs may request the preparation of a public inventory within a period of one month after the date of the deceased’s death. As already explained in the section on community of heirs, assets such as securities or real estate do not have to be liquidated immediately if this would currently only be possible with considerable losses.
• Clarify pension fund assets: The beneficiaries are entitled to the claims from the pension fund assets after the death of the insured person. In most cases, there are spouses or orphans entitled to a pension and a survivor’s pension is paid. In all other cases, the pension fund regulations determine what happens to the pension fund assets. The regulations vary among pension funds. It is therefore possible for a saved capital to be forfeited and for it to benefit the community of insured persons.
• Observe deadlines for declaration of disclaimer: Do you want to disclaim your inheritance due to overindebtedness of the testator or for other reasons? If so, you must submit a written declaration of disclaimer to the competent authority within three months of becoming aware of the death.
• Financial planning for the inheritance: Unless heirs have the appropriate financial expertise themselves, they should take care of sound asset management in good time. Digital offerings today enable competent and at the same time cost-effective support even for manageable assets.

With appropriate preparation, testators avoid disputes in the event of inheritance

A carefully planned estate can help avoid conflicts and ensure that the testator’s last will is fulfilled.

Advance inheritance is one way in which parents, for example, can reduce their taxable assets during their lifetime and children can already take advantage of their inheritance. In addition, inheritance taxes can be saved if necessary. However, heirs with an advance withdrawal must have the advance withdrawal offset against their inheritance. Although children, for example, may thus be treated unequally, the compulsory portion may still not be undercut.

In order to document one’s own will, a will is a central matter. Important: Spouses each need their own will. Although a will cannot completely avoid legal difficulties, it simplifies matters. To ensure that your will is taken into account in the event of incapacity, you should also consider a living will and an advance directive.

One way of donating your assets to a social or charitable purpose is to set up a foundation. This can help ensure that heirs can use the assets in a dignified manner after the deceased’s death.

Family businesses sometimes suffer from the fact that succession is not precisely regulated. Anyone wishing to preserve their life’s work should therefore plan in good time during their lifetime.

In this context, the legal structure of the company plays a major role, as it can affect inheritance tax and tax treatment. It is therefore highly recommended to consult with an experienced expert in order to consider the legal and tax consequences.

Separated spouses should know that even in the event of separation, intestate succession applies. If this is not desired, it can only be excluded by divorce or in part by a prenuptial agreement.

Conclusion: Ensure one’s own will for the estate with planning during one’s lifetime.

Death and inheritance are unpopular topics during one’s lifetime, and people like to avoid them. However, problems arise at the latest in the case of inheritance, when disputes arise among the heirs. Frequently, however, unresolved inheritance issues already lead to disputes and disadvantages during one’s lifetime. This can be the case, for example, in the case of an unresolved company succession, as a result of which the development of the company and thus the preservation of the assets can ultimately suffer.

A correctly and unambiguously drafted will, a living will and an advance directive are the appropriate means of planning the estate at an early stage and documenting one’s own will. The clarity of the regulations and clarification with the family ensures the testator’s will and minimizes the potential for conflict. Particularly in the case of larger estates, a lawyer with expertise in Swiss inheritance law should therefore be consulted. In addition to legal clarification, heirs should think about appropriate financial planning for the estate at an early stage. Today, the financial market offers competent asset management services for almost all sizes.

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