Succession planning: wills and inheritance contracts

Succession is not a topic to leave to the last minute. Anyone who owns a business, real estate or a complex estate has an interest in deciding during their lifetime who will receive what, avoiding the situation where the law decides in their place and the heirs quarrel for years. Swiss law offers two main instruments for organising the transfer of an estate: the will and the inheritance contract. Let’s see how they work and what scope for freedom they leave.

Statutory succession as the starting point

If you make no arrangements, the estate passes according to the order laid down by the Civil Code. The spouse or registered partner inherits alongside the descendants; in the absence of children, alongside the deceased’s parents and their line. The descendants inherit in equal shares. This scheme is the default: it applies automatically to anyone who has not planned. Often, however, it does not match the person’s real wishes, especially where there are blended families, unmarried cohabiting partners or businesses to keep together.

The forced-heirship share: the limit to freedom

The freedom to dispose is not unlimited. The law reserves for certain heirs a forced-heirship share (Pflichtteil), that is, a minimum portion of the estate that cannot be taken from them. Since the reform of succession law in force from 1 January 2023, the framework has changed in a more liberal direction:

• the forced share of descendants has been reduced and now corresponds to half of their statutory share;
• the forced share of parents has been abolished;
• the forced share of the spouse or registered partner remains equal to half of the statutory share.

The part exceeding the forced shares is the disposable portion, which may be disposed of freely in favour of anyone. The reform has therefore widened the room for manoeuvre: whoever plans today has more freedom than before to favour a cohabiting partner, a child, an institution or the business.

The will

The will is a unilateral and revocable act: it can be amended or annulled at any time as long as one is alive. There are two main forms:

• the holographic will, written entirely by hand, dated and signed by the testator. Simple and inexpensive, but exposed to the risk of formal defects and of being lost;
• the public will, drawn up with the involvement of an official or notary in the presence of two witnesses. More robust and suited to complex estates.

In the will you can appoint heirs, grant legacies (specific assets), name an executor and impose obligations. It is the typical instrument for expressing a wish that you want to be able to change over time.

The inheritance contract

The inheritance contract, by contrast, is a contract: it requires the form of the public will and the agreement between the disposing party and one or more counterparties. The essential difference is its binding nature: what is established in the contract cannot be amended unilaterally, but only with the consent of those who took part in it (save for grounds of dissolution provided by law).

It is the right instrument when mutual certainty is needed. Typical examples:

• an heir renounces their forced share, perhaps in return for an early settlement;
• the takeover of the family business is agreed with a child, giving stability to the entrepreneurial project;
• spouses agree on the destination of jointly owned assets.

Coordination with the matrimonial property regime

A frequent mistake is to plan the succession while ignoring the matrimonial property regime between spouses. Before the succession proper is even opened, the matrimonial property regime is liquidated (ordinarily the participation in acquired property). Only what remains to the deceased enters the estate. The marriage contract and the disposition upon death must therefore be thought through together: acting on only one front often produces results different from those expected.

The business in the succession

When there is a business in the estate, planning becomes crucial. Dividing the shares among several heirs without rules risks paralysing the company or forcing its sale. The instruments to avoid this exist: allocating the business to a single heir with a balancing payment to the others, inheritance contracts, statutory clauses and, in complex cases, dedicated holding structures. The golden rule is to plan years in advance, not in an emergency.

How we work at SIH ONE

We analyse the estate, the matrimonial property regime and the family’s objectives, quantify the forced shares and the disposable portion and build the most robust combination of will and inheritance contract for the specific case, coordinating the civil, tax and business aspects.

Do you want to organise the transfer of your estate in good time and avoid conflicts among heirs? Explore the services of our private division and plan your succession on solid foundations.