New International Succession Law: one step forward, one step back – Effective as of 1 January 2025

On 22 December 2023, the Swiss Federal Parliament adopted the draft bill to amend Chapter 6 of the Private International Law Act (PILA) to modernise Swiss law governing international successions and bring it into line with European law (in particular the EU Succession Regulation¹). 

The new rules, effective from 1 January 2025, will provide greater options for individuals with assets in Switzerland and abroad to organise their succession, thereby enhancing legal certainty and predictability regarding the distribution of their assets after death. This development is especially relevant in the context of increasing international mobility and ever more frequent international successions.

European Law 

Under the EU Succession Regulation², the testator can choose the law of the State of their nationality, at the time of making this choice or at the time of their death, to govern their succession. If they hold multiple nationalities, they can opt for the law of any of the relevant States. 

Thus, European nationals can freely and without restriction choose the application of their national law to settle their succession. 

Swiss Law

Under present Swiss law, Article 90(2) PILA provides that only exclusively foreign nationals may submit their succession to the law of one of their national States, by will or contract of succession. Swiss nationals with multiple nationalities cannot, as of today, choose another national law to govern their succession.  

In its message regarding the amendment to the PILA³, the Federal Council justified this limitation on the choice of law by making reference to the equal treatment of all Swiss nationals, whether they hold another nationality or not. However, it noted that this limitation also creates an inequality between Swiss nationals with multiple nationalities and foreign nationals. Since some form of inequality remains regardless of the option chosen, the Federal Council decided to adopt a solution that aligns the law with the EU Succession Regulation, while also increasing private autonomy. 

As a result, to harmonise Swiss law with European law by allowing all individuals, including Swiss nationals with multiple nationalities, the ability to choose a foreign national law, the Federal Council logically proposed a revision of the article on the choice of law in the draft bill attached to its message⁴. 

However, different views on this proposed provision were debated between the Council of States and the National Council during the legislative process. The Council of States wanted to ensure that the revision would not allow Swiss nationals to circumvent the rules on statutory entitlements (the so called “forced heirship rights”) and the freely disposable portion of an estate. On the other hand, the National Council believed that such an exclusion was contrary to the spirit of the liberal amendment to the PILA proposed by the Federal Council, which was intended to harmonise Swiss law with European law.

The National Council ultimately proposed a very Swiss compromise in Article 91(1) of the revised PILA, allowing Swiss nationals with multiple nationalities to choose a national law to govern their succession through a will or contract of succession, while ensuring compliance with Swiss legal provisions on the freely disposable portion and forced heirship rights. 

Therefore, the content of Article 91(1) of the revised PILA, adopted by Parliament on 22 December 2023⁵, is as follows: 

1.—A person may subject their succession, through a will or contract of succession, to the law of one of their national States. The testator must have held the nationality in question at the time  of making the disposition or at the time of their death. Swiss nationals may not derogate from the provisions of Swiss law on freely disposable portion. 

According to this new bill, it will be possible for Swiss nationals with multiple nationalities to choose a foreign inheritance law. However, Swiss law on forced heirship rights remains applicable⁶. Therefore, it will still be necessary to comply with these rules even if a foreign law is applied. It remains to be determined whether, in practice, the estate will be defined according to Swiss law or foreign law, which may have different calculation rules. Additionally, the question arises whether Article 91 of the revised PILA allows an heir to bring a claim for abatement in a Swiss court, particularly when the estate is already being handled by foreign authorities. 

The requirement to always comply with Swiss forced heirship rules may seem strict at first glance, but according to a study by the Federal Office of Justice, the legislation in neighbouring countries—which are most affected by situations of dual nationality with Swiss nationals—generally provides for higher forced heirship rights than those applying under Swiss law. As a result, the provision in Article 91(1) of the revised PILA will, in practice, often have little impact on the testamentary dispositions taken by Swiss nationals with multiple nationalities, except notably for Anglo-Saxons. 

Indeed, this provision will pose a more significant obstacle in cases where a Swiss national holds the nationality of a State with lower, or even non-existent, forced heirship rights, such as in common law jurisdictions like the United Kingdom or the United States. 

It should also be noted that, according to Article 91(2) of the revised PILA, an election of jurisdiction in favour of the Swiss authorities for all or part of a Swiss national‘s estate creates a rebuttable presumption of an election of Swiss law.

Conclusion 

Under present Swiss law currently in force, a foreign national can already choose to apply their national law to their succession, offering possible alternatives to Swiss law, especially if the foreign law does not provide for forced heirship rights. 

As of 1 January 2025, this option will be extended to foreign nationals who also hold Swiss nationality (which was not possible under the current regime), but within the limits imposed by the respect for Swiss forced heirship rights. Despite this restriction, the use of foreign law by these individuals can broaden the range of estate planning tools available. Depending on the applicable foreign law, it may even be possible to provide for testamentary trusts, although this remains controversial under Swiss law⁷. 

In summary, Swiss law is introducing more freedom for international estate planning for Swiss dual nationals, which is always a positive development, even though this freedom remains somewhat constrained. 

In any case, international succession planning remains always a highly complex topic subject to numerous and rapidly evolving rules in each country, both from a succession law and tax perspective. 

The increased mobility of families and entrepreneurs, as well as the growing frequency of holding assets abroad, make it necessary to review each situation individually to avoid future conflicts between heirs and to facilitate procedures with Swiss and foreign authorities.

between heirs and to facilitate procedures with Swiss and foreign authorities.
between heirs and to facilitate procedures with Swiss and foreign authorities.

¹Regulation (EU) No 650/2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession.
²Article 22(1).
³FF 2020 3215.
⁴FF 2020 3259, Legislative proposal: “A person may subject their succession, through a will or contract of succession, to the law of one of their national States. The testator must have held the nationality in question at the time of making the disposition or at the time of their death.”
⁵FF 2024 32.
⁶For your information, forced heirship rights have been reduced since the new inheritance law came into effect on 1 January 2023; see our Newsletter of 1 June 2021.
⁷Decision of the Federal Supreme Court 2C_722/2017 of 13 December 2017, §5.4.