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22 December 2020 / article

Update on revision of Swiss inheritance law – adoption of reduction of compulsory portion

This article provides a short update on the revision of Swiss inheritance law and the innovations adopted of 18 December 2020 in this regard.

Update On Revision Of Swiss Inheritance Law

In its report "Modernisation of Family Law" of 25 March 2015, the Federal Council demonstrated that the current family law does not sufficiently reflect social realities. The Federal Council consequently adopted the dispatch on the revision of the inheritance law on 29 August 2018. This first part of the proposed revision of Swiss Civil Code (CC) was intended in particular to expand the testator’s power of disposal by reducing the compulsory portions in order to adapt the Swiss inheritance law to the new social forms of cohabitation, i.e. patchwork families, de facto civil partnerships with joint children or families with single mothers or fathers.

In this context, the Federal Council also proposed to enact a regulation for civil partners. Today, they are left empty-handed if the testator has not made any corresponding arrangements. The Federal Council wanted to secure their subsistence level with a support claim, provided the couple lived together for at least five years. This provision however was repealed by parliament on 22 September 2020, as it feared that the regulation would be difficult to implement and would lead to complex inheritance disputes.

On 16 December 2020, the Swiss National Council has approved the drafting commission’s proposal for the final vote on the first part on the revision. One of the most important changes adopted hereby is the reduction of the compulsory portion from three quarters (3/4) to half (1/2) of the statutory inheritance entitlement for descendants. This leads to more freedom for the testator in formulating his last will. A smaller compulsory portion also allows for more flexibility in the regulation of corporate succession, especially for owners of SMEs.

The date of entry into force of the revised law has not yet been defined: It is subject to an optional referendum. If the optional referendum is taken, there will be a popular vote. If the referendum is not taken or if the law is confirmed by popular vote, it will be published in the Official Compilation with a reference to the date of entry into force.

The second part of the revision of the CC was sent out for consultation on 10 April 2019 and contains provisions on simplification of corporate succession under Swiss inheritance law. The Federal Council took note of the consultation results concerning this simplification of corporate succession on 26 February 2020 and instructed the Federal Department of Justice and Police to prepare a dispatch. The draft law on simplified corporate succession is currently being finalised and will be submitted to the Councils together with the dispatch or the commission report in early 2021.

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