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On January 1, 2025, a new international inheritance law will come into effect in Switzerland. This change will benefit not only Swiss citizens living abroad and dual nationals, but also local wealth managers. The current process for estate administration in Switzerland, which involves Swiss authorities overseeing tasks such as opening wills and issuing inheritance certificates, has often posed challenges in complex cases. This is especially true for individuals who hold EU citizenship, are Swiss nationals living in other countries, or have structured their estate under UK law, including trusts. Additionally, estates with assets spread across multiple countries can also create complications.
The new law will allow dual nationals and Swiss citizens living abroad to opt for foreign jurisdiction for their estate, rather than having it governed by Swiss law. This will give them more freedom and flexibility in determining how their estate is handled after their passing. However, there is one restriction: if Swiss authorities are involved in the estate administration, Swiss compulsory portions must still be upheld, even if foreign inheritance laws are applied to the rest of the estate. This means that approximately 1.8 million individuals will be affected by this change, including one million dual nationals residing in Switzerland and over 800,000 Swiss citizens living abroad.
While this reform is a positive step towards giving individuals more control over their estate, there are some flaws. The requirement to apply Swiss compulsory portions for dual nationals opting for foreign inheritance laws is seen as less than ideal by some legal experts. However, overall, this change is viewed as an attractive solution that will not deter anyone from moving to Switzerland. In fact, it may even enhance the country’s appeal and strengthen its financial center.
This revision could also give Switzerland a competitive advantage over other countries, such as the UK, which is planning to abolish its Non-Dom status. This status allowed individuals to reside in the UK without being fully tax-resident, but with its removal, Switzerland may become a more attractive option for individuals looking to manage their wealth and estate. Overall, this change in international inheritance law is seen as a positive development for Switzerland and its financial sector.