Swiss inheritance law, which has been revised January 1, 2023, contains a number of key changes. Most important here: the reduction of statutory compulsory portions allows for a larger divisible portion. This gives testators more freedom to dispose of their estate. In view of the approximately 90 billion Swiss francs that are inherited in Switzerland every year, it is worth pointing out once again that only 40 per cent of testators have made arrangements - and that this does not always have to be a will.
The compulsory portion for parents was abolished altogether and the one for direct descendants, since January 1, 2023 stands at only 50 per cent. This means that the freely available quota is much higher. In order to make use of this additional leeway, however, testators must draw up a will or conclude a contractual agreement. This is where Private Placement Life comes into play.
How this works can be explained with a simple example.
Mrs. Müller, widowed, has a son, but also a good friend who is very close to her and to whom she wants to leave part of her wealth. Under the previous inheritance law, she could give him a maximum of 25 per cent of her estate. Now she can pass on up to 50 percent to him - but only if she makes a corresponding arrangement during her lifetime. Otherwise, the son will receive the entire inheritance.
The perfect solution for the testator is to take out a private placement life insurance policy recognised in Switzerland. Mrs Müller is both the policyholder and the insured person. She names her good friend as beneficiary in the event of her death. The insurance benefit is not included in the estate. A certificate of inheritance is therefore not necessary. The friend receives the benefit directly from the insurance contract and does not have to be included in the will.
This case study shows that today, more than ever, it is up to each individual to arrange the succession of assets according to his or her own wishes. A clear provision can also help avoid disputes later on, trouble or long waiting periods.
If you are interested in information on this or any other inheritance planning solution, we look forward to hearing from you. Our experts will be happy to advise you and work with you to find a solution tailored to your individual situation.