Inheritance law since 2023: more room for handing over the company

Since 1 January 2023, the revised inheritance law has applied in Switzerland. The most important change for entrepreneurs: the compulsory portion of descendants was reduced from three quarters to half of the statutory inheritance entitlement. The compulsory portion of parents has been abolished entirely. The spouse's compulsory portion remains at half.

What this means in concrete terms

An example. A widowed businesswoman has two children. Under the old law, she could freely dispose of one quarter of her estate, while three quarters were tied up as the children's compulsory portion. Since 2023, half is freely disposable. If she wants to transfer the company to the child who works in the business, she has twice as much room to do so without infringing the compulsory portions.

The freely disposable share can be used deliberately: through a will or inheritance contract in favour of the successor, through an advancement of inheritance with a hotchpot arrangement, or through a combination of a sale at a reduced price and a gift of the difference.

Reviewing existing wills

Many wills from before 2023 contain wording such as "I limit my children to their compulsory portion". Under the new law, this means a smaller share than was intended when the will was drawn up. Whether that reflects the testator's wishes needs to be checked. Conversely, dispositions that refer to the old shares may today leave more freedom than the testator wanted to use.

Limits remain

The compulsory portion is lower, but it still exists. Anyone who infringes it risks an action for abatement by the heirs who were passed over. With companies, the question of valuation is added: at what value is the company included in the division of the estate? This is where it is decided whether an arrangement holds or ends up in court. A sound valuation and an inheritance contract to which all parties have agreed provide certainty for everyone.

Recommendation

Entrepreneurs with a will or inheritance contract from before 2023 should have the documents reviewed once. Those who have no arrangement yet should make use of the new room for manoeuvre from the outset. In both cases, the succession of the company belongs at the centre of the planning.