A significant change in international inheritance law is set to take effect in Switzerland on January 1, 2025. This change will benefit Swiss citizens residing abroad, dual nationals, and local asset managers who handle estate management.
The current system has led to confusion regarding which authorities are responsible for estate settlements, especially for individuals with ties to multiple jurisdictions. The upcoming changes aim to streamline these processes and provide clarity and flexibility for dual nationals and Swiss citizens living abroad.
Under the new law, dual nationals and Swiss citizens living outside of Switzerland will have the ability to choose whether Swiss or foreign law governs their estate. However, if Swiss authorities maintain jurisdiction, the Swiss compulsory portion must still be considered, even if the estate is otherwise governed by foreign law. This provision has raised concerns among legal experts, but overall, the amendment is seen as a positive development that enhances Switzerland's appeal as a financial center.
The revised law will impact approximately 1.8 million individuals, including one million dual citizens residing in Switzerland and 800,000 Swiss nationals living abroad. The changes are particularly relevant in the context of evolving international tax and estate planning. Legal experts have highlighted both the advantages and potential pitfalls of the revised law, with the ability to choose applicable laws based on individual circumstances seen as a positive aspect. However, the requirement to consider the Swiss compulsory portion, even when opting for foreign law, adds complexity to the framework.
The revised law is expected to enhance Switzerland's competitive edge as a financial center by providing greater flexibility and choice for dual nationals and expatriates. It may also lead to increased collaboration between Swiss asset managers and international legal experts in estate planning. Overall, the changes represent a significant evolution in estate management, offering greater autonomy to dual nationals and expatriates in determining the legal frameworks that govern their estates.