The Federal Council announced on 19 May that significant amendments to Swiss inheritance law to provide for increased testamentary freedom will enter into force on 1 January 2023. The reforms were approved by the Swiss parliament on 18 December 2020 and no referendum had been requested before the referendum deadline expired on 12 April.
The main intent of the new inheritance law is to give greater testamentary freedom by reducing the elements of forced heirship and to provide more flexibility in the transfer of family businesses.
The statutory entitlement (réserve légale) of descendants is to be reduced from 75% to 50% of their succession rights, while the existing 50% statutory entitlement of parents is to be abolished entirely. The statutory entitlement of a surviving spouse and registered partner is maintained at 50% of their succession right. This will enable a testator to dispose of their assets more freely and to a greater extent to the persons of their choice.
The right to dispose where there is a usufruct (the right to use and enjoy a property) in favour of the surviving spouse or registered partner is increased from 25% to 50% of the estate. A testator will therefore be able to grant a surviving spouse or partner half the estate in full ownership and the usufruct on the other half.
In the event of a testator’s death during divorce or partnership dissolution proceedings, the surviving spouse will under certain conditions lose his or her status as a forced heir and will not be entitled to a compulsory share of the estate.
Further legislative measures to remove some existing obstacles to the transfer of a business by succession are also under consideration. The Federal Council is expected to table the relevant Bill in parliament later this year, along with revisions to the Private International Law Act to reduce the risk of conflicts of jurisdiction and conflicting decisions with other EU Member States.
