SWITZERLAND: An Introduction to Family/Matrimonial: High Net Worth
Modernisation of Inheritance and Maintenance in Swiss Family Law
On 1 January 2023, the revised Swiss inheritance law came into force to take into account developments in family law, in particular the diversification of family models. It applies with immediate effect to anyone who died after 31 December 2022, regardless of the date on which a will or contract of inheritance may have been drawn up, and gives testators greater freedom to dispose of their assets.
In terms of family maintenance law, the Federal Supreme Court, Switzerland’s highest judicial authority, has adopted in its case law a new definition of marriage (known in German as lebensprägend) that, on one hand, has a decisive impact on the life of one of the spouses in order to reinforce the principle of their financial independence after divorce and, on the other hand, has modernised and simplified the method of calculating child and spousal maintenance contributions to be applied by the courts in the event of separation.
New developments in inheritance law
Two essential modifications have been introduced on this matter by the legislature.
The first change is to give testators greater freedom to dispose of their assets by reducing the legal reserves. A testator will be able to freely dispose of a greater proportion of his or her assets, and in particular favour his or her spouse or de facto partner. Whereas under the previous law, the testator could only freely dispose of an available portion, corresponding to 37.5% of the total estate with descendants and a spouse or registered partner, the new law now allows him or her to freely dispose of 50% in the same situation.
The second new feature allows testators to freely dispose of their assets in the event of divorce proceedings or dissolution of a registered partnership. Whereas the previous law on inheritance provided that spouses and registered partners remained each other’s legal and reserved heirs until the divorce or dissolution of the registered partnership came into effect, the new law allows the spouse/registered partner to exclude the other completely from the estate by denying him or her the status of legal and reserved heir in a will.
In the absence of a testamentary provision, the new law provides that the spouse only loses his or her status as a reserved heir, but remains a legal heir until the divorce decree or dissolution of the registered partnership comes into force. This means that the commencement of divorce proceedings or proceedings for the dissolution of a registered partnership entails the loss of the spouse’s reserve if the proceedings were brought jointly or on a unilateral application converted into a joint application, or if the spouses had been living separately for two years at the time of referral. However, the surviving spouse or registered partner will remain the legal heir until the divorce or dissolution order comes into force. Thus, in the absence of inheritance provisions set out in a will or an inheritance agreement excluding the surviving spouse or registered partner, the latter will retain his or her right to his or her share of the estate in the event of death before the divorce or dissolution becomes final. This compromise takes into account both the survivor’s need to provide for his or her estate and any desire on the part of the settlor to be able to exclude his or her spouse or registered partner from his or her estate as a result of the divorce or dissolution proceedings.
Therefore, in order to exclude the surviving spouse from his or her estate before the divorce or dissolution order comes into force, the spouse must mention this in a disposition upon mortis causa (will or inheritance agreement).
In addition, the new inheritance law allows spouses to retain the option of drafting a clause in their marriage contract stipulating that the surviving spouse may not take over the entirety of the acquired property or joint assets if divorce proceedings are in progress at the time of death.
New rules applicable to post-divorce maintenance contributions
In recent years, the Federal Supreme Court has gradually revised the criteria applicable to the benefit of a post-divorce maintenance contribution, abandoning its long-standing and consistent case law, which protected the spouse’s trust in the marriage and the freely agreed division of tasks, and established a right to maintain the previous standard of living during the marriage and until the separation. The principle of financial independence, under which each spouse is required to provide for his or her own maintenance after the divorce, now takes precedence over the principle of joint and several liability. The overall economic capacity of the former matrimonial community is thus replaced by that of each individual. In particular, the Swiss High Court has abandoned the so-called “45 years rule”, according to which a spouse could not be required to return to gainful employment after the age of 45. The judge must now carry out a concrete and individual examination of each case, rather than a schematic one: a maintenance contribution is only due if the spouse’s integration or reintegration into the labour market is not possible due to, for example, age, state of health, distance from the world of work, or the care of young children, which must be demonstrated by the spouse requesting a pension.
Uniform method for calculating maintenance contributions in Switzerland
In order to increase legal certainty, the Federal Supreme Court has established a uniform method for calculating maintenance contributions under family law throughout Switzerland - the minimum subsistence method with distribution of the surplus (known as the two-stage method).
Under this method, the available financial resources – ie, actual or hypothetical income – are determined on the one hand, and the needs of the person whose maintenance is being examined (suitable maintenance) are calculated on the other. Lastly, the available resources are divided between the various family members, in a certain order of priority, so as to cover the minimum subsistence under debt enforcement law (basic health insurance, housing costs and lump-sum payments in particular) or, if there are sufficient resources, the minimum subsistence under family law.
If there is a surplus after covering the minimum subsistence under family law, it will be divided fairly among the beneficiaries – ie, in principle, between the parents and the minor children by “large heads” and “small heads”, the share of a child corresponding to half of a parent’s share.
However, this method is not applicable in the case of particularly favourable circumstances (high income), as it would simply not make sense. In such a case, the method based on the expenditure required to maintain the standard of living during the couple’s life should be used. In such cases, it is not appropriate to compare incomes and minimum subsistence levels; instead, the method should be based on the expenses necessary to maintain the lifestyle, adding the expenses inherent to the separation and, for the rest, maintaining the items that existed during the time the couple lived together as a result of the parties’ agreement. Since this method involves a concrete calculation, the onus is on the maintenance creditor to demonstrate the expenses necessary to maintain his or her lifestyle.