SWITZERLAND Law and Practice Contributed by: Olivier Sigg and Quentin Thorens, Walder Wyss
1. Contemporary Cultural Considerations in Succession Planning 1.1 Social and Cultural Attitudes In Switzerland, as in most European civil-law coun- tries, succession planning is shaped by a cultural tradition valuing stability and the preservation of fam- ily wealth over generations. Estate planning in Swit- zerland is therefore mostly centred on family. Indeed, although freedom of testation exists in Switzerland, it is significantly restricted by tax rules, which mostly prioritise spouses and descendants, as well as by forced heirship rules, which apply to half of the estate. However, the Swiss legal framework has evolved towards a more flexible approach in the past years, as the portion of the estate subject to forced heirship was reduced in 2023 from three-quarters to one-half of the estate, reflecting a broader societal shift towards greater testamentary freedom in succession planning. Moreover, as wealthy families become more interna- tionally mobile and globalised, there is a discernible shift towards more flexible succession planning tech- niques, including the implementation of trusts and similar wealth-structuring arrangements. Similarly, there are an increasing number of non-tradi- tional or blended families, non-married long-term part- ners, and cross-border couples and families. These situations pose challenges because Swiss statutory rules still reflect traditional family models. As a result, clients are becoming progressively aware that tailored planning through wills, (marital) agreements and suc- cession agreements is essential to avoid outcomes that do not match their family reality. Despite these developments, it is still not uncommon for high net worth individuals to pass away in Switzer- land with little or no structured succession planning, relying primarily on intestacy rules. Although such an approach may be workable within traditional Swiss family settings, it sometimes leads, especially in more international family configurations, to significant legal and practical complications. 1.2 Wealth Profiles and Industry Influences Wealth profiles in Switzerland are diverse and include both long-established families rooted in traditional
sectors and internationally mobile individuals who have created wealth more recently in different sectors. Historically, Swiss wealth has been concentrated in families active in clearly defined sectors, in particular banking and finance, watchmaking, pharmaceuticals and certain industrial fields. These families gener- ally prioritise long-term wealth preservation and the continuity of family assets across generations. Estate planning in such contexts is therefore typically charac- terised by sophisticated structures designed to safe- guard and transmit wealth over time. In recent decades, new fortunes have emerged in Switzerland, notably in the technology and financial services sectors. Many entrepreneurs, start-up found- ers and international executives have chosen to set- tle in Switzerland owing to the country’s political and economic stability, high-quality education system, excellent standard of living and, naturally, also for tax reasons. These individuals frequently present cross- border family situations and hold assets located in multiple jurisdictions. They therefore seek wealth and succession planning tailored to this international dimension and, at times, greater flexibility reflecting the mobility of family members. Consequently, historical and industrial background, as well as the age profile of wealthy individuals, inevitably influences the type of planning structures they choose to implement.
2. Residency and Domicile for Purposes of Wealth and Estate Planning 2.1 Determining Domicile
Domicile under Swiss law refers to the place in which a person resides with the intention of settling; resi- dence for the purpose of education or the accom- modation of a person in an educative institution or care home, a hospital or a penal institution does not by itself establish domicile. In Switzerland, no inheritance tax is levied at the fed- eral level. It is therefore solely governed by cantonal law and consequently the applicable rules vary from
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