Summary of the most important points
- The basis for any inheritance process is always intestate succession. Its rules determine whether there are heirs who must receive statutory entitlements and what proportion of the estate can be bequeathed freely. This is determined by the state of the assets and the relatives at the time of the testator’s death.
- The inheritance process begins upon the testator’s death. If necessary, the responsible cantonal authorities can take steps to secure it. They must takes steps including opening the will of the deceased person. Wills and contracts of succession allow for many different dispositions that deviate from intestate succession.
- The estate is transferred in its entirety to the heirs when there is more than one. In order for each of them to be able to dispose of his or her share, the estate must be divided. The heirs should work on this together in order to arrive at a solution that is agreed upon by and acceptable to all of them.
What is the basic procedure for an inheritance?
The simplest type of inheritance is one in which the testator does not leave any testamentary disposition (a will or contract of succession) behind. This also dictates the basic structure of every inheritance process.
Intestate succession (without a will)
If neither a will (last will and testament) nor any contract of succession exists, intestate succession applies. This means that the nearest living relatives inherit. This is typically the spouse/registered partner and descendants such as children, grandchildren, etc. If there are no descendants, a proportion of the inheritance falls to the parents’ line. If the parents are already deceased, their remaining descendants, i.e. the deceased person’s siblings and their children, are next in line to inherit. Which of them inherits what proportion of the assets depends on how many people share the inheritance. If the person has no surviving spouse/registered partner nor any relatives, the inheritance passes to the public authorities.
Two brief examples
Example 1
If a woman passes away with no testamentary disposition and is survived by her husband, a son and a daughter, the husband inherits half and the son and daughter each inherit one quarter of the inheritance.
Example 2
If a person passes away and is survived by his registered partner, his mother and his sister, the registered partner receives three quarters of the inheritance and the mother one quarter. The sister would not be in line for the inheritance until after the mother’s death; until that time, the law does not provide for her to inherit.
Statutory entitlement
Particularly close relatives have not only statutory inheritance shares but also a specially protected claim to a statutory inheritance entitlement. Currently, these are set at three quarters of the statutory inheritance share for descendants, and half each for parents and spouses/registered partners. With the revised law of succession that takes effect on 1 January 2023, the statutory inheritance entitlements for parents will be eliminated and those for descendants reduced to half. After that date, only descendants, spouses and registered partners will have statutory inheritance entitlements, which will uniformly amount to half of their statutory inheritance shares. That results in greater freedom for testators. They can avail themselves of this freedom using a will or contract of succession – see below for more information.
Starting the inheritance process and security measures
Upon a testator’s death, the inheritance process begins. This point in time determines how the estate is defined and the community of heirs as well as the legatees. The inheritance process occurs at the last place of residence of the testator. The authorities responsible at that location under cantonal law are responsible for conducting the inheritance process. The heirs’ residences are immaterial.
As soon as the authorities have become aware of the testator’s death, they take all necessary measures to secure the inheritance procedure automatically. Depending on the situation, this mainly includes the sealing of the inheritance, taking inventory, ordering the administration of the inheritance and opening testamentary dispositions. Swiss federal law and in some cases also cantonal law describe in more detail in what cases these «security measures» apply.
Acquisition of the inheritance: Universal succession
All assets and liabilities, i.e. the testator’s assets minus unpaid debts, form the inheritance (also known as the estate). They pass to the heirs in their entirety at the time of death. That means that the heirs (but not the legatees) are also liable for the testator’s debts. The assets are assessed based on their current market value and entered into the inventory.
Who inherits? – Community of heirs
An heir is any person who is alive at the time of the testator’s death and has a claim to the inheritance or a part thereof, whether statutorily or through a testamentary disposition, and has neither been deemed unworthy to inherit nor legally disinherited.
When there are multiple heirs, these heirs constitute a community of heirs until the division of the estate, which means that they exercise all rights and duties with respect to the estate as a group. As joint owners, they can only dispose of the estate unanimously. In addition, they must inform one another of any information that is material to the administration of the estate.
If there is only one heir, the community of heirs does not apply. The sole heir inherits the entire estate and can dispose of it immediately.
Acceptance, public inventory and waiver
No-one is forced to accept an inheritance against their will. Heirs have the option to accept the inheritance without reservation or under public inventory or to waive it. The third option is recommended especially in cases of well-founded concerns about excessive debt. With acceptance under public inventory, the heirs are only liable for the testator’s debts that are registered by the creditors in a timely manner and taken into the public inventory. Anyone who waives the inheritance is treated as if they had predeceased the testator and is not considered for the inheritance. If all the heirs waive the inheritance, or if none exist, the matter proceeds with legal liquidation under the normal procedures, or according to bankruptcy law in the case of over-indebtedness.
Division of the estate
The situation of the community of heirs is provisional. In order for each heir to be able to dispose of their share freely, the estate must be divided. Each heir can demand this at any time unless the law or a contract dictates otherwise. The division of the estate determines how much accrues to whom. Then comes the consideration of whose share is to be settled with which of the assets in the estate. The claim to a particular value and the claim to the assets themselves must be considered separately. This is because all the heirs have the same basic claim to the assets in the estate. There are three options for the division of the estate:
- If the heirs are in agreement, they can enter into an inheritance division contract. This is a unanimous agreement regulating who receives which assets from the estate in order to satisfy his or her claims based on value.
- If there is no agreement, the estate is divided by forming lots. The responsible authority takes care of this based on local norms, the circumstances of the people involved and the wishes of the majority.
- If the formation of lots does not work, for example because the majority of the estate is tied up in individual assets (particularly property), sale as the last option is considered. The proceeds can then be divided among the heirs. In such cases, a loss in value cannot be precluded; therefore, division by agreement or forming lots is to be given preference. Family documents and items of sentimental value should not be sold if an heir objects.
After the division of the estate
Upon signing an inheritance division contract or accepting the assigned lots, the division of the inheritance is binding for the heirs. At that point, they are “separated” – each heir has received a part of the assets from the estate as their own (sole) property and can then freely – i.e. independently of the others – dispose of them.
For a certain amount of time, however, the liability of the heirs remains in effect. That means, firstly, that the heirs are liable to one another for the quality of the assets in the estate. If an asset in the estate exhibits legal or material defects, the heirs are liable under the principles of sales law. With respect to third-party claims, they are jointly and severally liable for a period of five years and with all their assets.
What changes when there are testamentary dispositions?
The principles we have looked at so far apply to every inheritance. In addition, however, inheritance law leaves not inconsiderable room to maneuver which is known as «free disposition». This allows you to dispose of your estate freely within the limits of the law. If you exercise this option, individual aspects of the inheritance process change. Basically, however, the steps are based on the process as described above.
Requirements and limitations
The legal limitations regarding testamentary disposition (will and contract of succession) are of a personal, formal and content-related nature. If a testamentary disposition does not fulfil these requirements, it can be challenged.
In the personal regard, the testamentary capacity of the testator is required. This is fulfilled when he or she is of sound judgment and has attained the age of majority.
As a matter of form, the formal requirements for the testamentary disposition must be met. This chiefly means that a will must either be written by hand or officially notarised. A contract of succession must always be officially notarised.
In terms of content, the dispositions set forth may not contravene valid law nor be immoral. It is not permitted, for example, to withhold the statutory entitlement from one’s own children without cause.
Within these limitations, you have various options to dispose of your estate. Because the contract of succession also requires the consent of the other parties involved, it provides even more freedom than the will. But it is far more difficult to change. A contract of succession may be with or without payment, and may contain gifts or the waiver of claims arising from inheritance law.
Types of disposition
Here are just a few examples of what a will or contract of succession may contain: You can use it to name heirs (“designated heirs”), determine legacies or even set up a foundation. Of course you may also change the shares in the inheritance, i.e. who receives how much of the estate, up to the statutory entitlement. With the provisions of law regarding division of the estate, you can define who should receive what assets, as long as they are calculated against their share of the inheritance. You can also pre-plan for various eventualities by determining preliminary heirs, subsequent heirs and substitute heirs as well as by setting out requirements or conditions. By appointing an executor, you can lend weight to your testamentary dispositions by naming a person of trust to implement the inheritance process.
Submitting, opening and reading the will to the heirs
When a testamentary disposition is found upon a testator’s death, it must be submitted to the authorities without delay. When a testamentary disposition is found upon a testator’s death, it must be submitted to the authorities without delay. Anyone who keeps a will or finds one among the testator’s belongings is required to submit it. They are also required to submit it even if they consider it invalid. Should they neglect this duty, they can be held personally liable for any damage arising from their inaction. In addition, persons committing this misdeed face potential unworthiness to inherit and possibly even charges of concealing a legal document.
Within one month of submission, the responsible authority opens the proceedings for the heirs. In the process, it shares with them the contents of the disposition and gives them a copy of it. The heirs may also receive a certificate of inheritance provisionally identifying them as legal heirs. That makes it possible to access the testator’s frozen assets (such as those held in bank accounts or safes).
What are the main causes of complications?
Ideally, the inheritance procedure can be completed without major complications. This is especially true when the legal situation is clear, testamentary dispositions are clear and not subject to objections, and the heirs are in agreement among themselves. At the same time, however, there are points that often result in complications in practice. Inheritance disputes or lawsuits can consume a great deal of time, money and attention. That is why it is good to understand critical points so as to prevent problems before they happen.
One major source of problems is the vulnerability of testamentary dispositions to challenges. If such a document does not fulfil the requirements set forth above, people with an interest in declaring it invalid can challenge it with an invalidity claim. This is possible, for example, if formal requirements are not fulfilled, the testator was not of sound mind when the document was drafted, or if it contains impossible, illegal or immoral content.
If the invalidity claim is successful, the disposition that has been challenged is partially or fully voided. It is replaced by earlier dispositions or – if none exist – intestate succession (see introduction).
If statutory entitlements or the provisions of a contract of succession are contravened, these are also grounds for challenging a will. This is what the action in abatement and similar tools are used for. Should third parties be unjustly in possession of items that belong to the estate, heirs can demand that they be turned over by means of an inheritance recovery action.
If individual heirs have received assets during the testator’s lifetime that are calculated against their share in the inheritance, they may be liable to compensate the value under certain circumstances. That means that they must inform the other heirs of their inheritance advances and “throw them into the pot” of the estate. With these additions, the total estate grows so that there are more assets to distribute. But the testator can also dispense with the compensation.
Last but not least, there is a matter that affects the heirs amongst themselves and also the testator’s estate planning: If they are all in agreement and “pull together”, the inheritance process can be quick and straightforward to complete. That is in everyone’s interest. If, however, there is ambiguity and discord, inheritance disputes can stretch out over years and block the majority of the assets in the estate or even consume them. To prevent this, it makes sense to involve the people who are likely to be included in a future inheritance during the testator’s lifetime, while the testamentary disposition is being drawn up. In complex cases, it is also advisable to get advice from experts. They can help arrive at solutions that are satisfactory for all parties, which is the most effective way to prevent inheritance conflicts.