SWITZERLAND Law and Practice Contributed by: Olivier Sigg and Quentin Thorens, Walder Wyss
into the trust in compliance with the legal rules of the jurisdictions concerned, it will in principle be recog- nised in Switzerland. However, the transfer of assets into a trust may nev - ertheless infringe the rules on forced heirship (cf 3.2 Forced Heirship ). In such circumstances, the dis- position may be subject to claw-back or abatement actions, allowing protected heirs to recover the portion necessary to restore their compulsory entitlements. Swiss law contains specific provisions governing foundations, including so-called family foundations established for the benefit of members of the found- er’s family. The permissible purposes of a Swiss family founda- tion are interpreted restrictively. According to the case law of the Federal Supreme Court, the statutory list of purposes is exhaustive and limited to education, welfare and health. Support for family members must therefore remain ancillary and situation-dependent, typically relating to youth, the establishment of an independent livelihood or circumstances of hardship. Swiss law does not allow family members to ben - efit unconditionally from foundation assets in order to finance their ordinary living expenses or generally enhance their economic position. Foundations pursu- ing broader or maintenance-type purposes are con- sequently regarded as unlawful and void. By contrast, under Swiss private international law, for- eign private foundations are recognised in Switzerland provided that they comply with the publicity or regis- tration requirements of the governing foreign law or, in the absence of such requirements, are validly organ- ised under that law. This recognition may apply even where the foreign foundation is permitted to cover, in whole or in part, the beneficiaries’ living expenses. 9.2 Recent Developments Affecting Planning Vehicles In a public deliberation held in February 2026, the Federal Supreme Court examined whether a foreign resident could transfer a second home to a American trust in favour of their family members without prior authorisation under the Federal Act on the Acquisi-
tion of Immovable Property in Switzerland by Foreign Non-Residents. The facts were as follows: a British father who owned a holiday home in Switzerland established a family trust governed by New York law in 2020 together with his wife and two sons, all of whom acted both as trus- tees and as beneficiaries. In 2022, the Bern Adminis- trative Court held that transferring the property to the trust did not require authorisation under the Federal Act on the Acquisition of Immovable Property in Swit- zerland by Foreign Non-Residents. Following an appeal by the Federal Office of Justice, the Federal Supreme Court overturned that decision in its public deliberation of 5 February 2026. The Court reiterated that the Federal Act on the Acquisi- tion of Immovable Property in Switzerland by Foreign Non-Residents, as a matter of principle, subjects the acquisition of immovable property by persons abroad to an authorisation requirement and estab- lishes a deliberately broad regime with only limited statutory exceptions, in particular for transfers to a spouse or to relatives in the direct line. In this context, the Court held that, as a trust does not fall within any of these exceptions, a transfer without authorisation is not permissible. Moreover, although cantonal law may allow foreign natural persons to acquire holiday homes under certain conditions, a trust constitutes a distinct legal structure, meaning that no legislative gap can be relied upon. This decision confirms that, for persons abroad own- ing real estate in Switzerland, the use of trusts may constitute a viable estate-planning mechanism, but is one that generally requires prior authorisation under the Federal Act on the Acquisition of Immovable Prop- erty in Switzerland by Foreign Non-Residents. By con- trast, direct transfers to a spouse or to ascendants or descendants may fall within the statutory exceptions and therefore not require such authorisation.
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