- · Switzerland's revised inheritance law, in force since 1 January 2023, reduces descendants' compulsory portions from three-quarters to one-half of their statutory share, materially expanding testamentary freedom.
- · Parents' compulsory portions are abolished entirely, removing a further constraint on estate planning.
- · Family business owners can now concentrate operational control in one heir while structuring flexible, negotiated compensation for non-active siblings — without triggering forced-heirship claims.
- · Existing wills and inheritance contracts drafted before 2023 require prompt legal review, as transitional ambiguities carry real planning risk.
Swiss inheritance law is not a subject that tends to generate excitement outside of notaries' offices and M&A due-diligence rooms. Yet the reform that entered force on 1 January 2023 represents one of the most consequential changes to the Swiss Civil Code's succession provisions in modern memory. For owners of family-held businesses contemplating a structured transition, and for the advisors, family offices, and institutional buyers who accompany those processes, the practical implications are substantial enough to warrant careful attention.
The reform does not reinvent Swiss succession law. It recalibrates it — deliberately, and with family business continuity explicitly in view.
Under the prior regime, Swiss law imposed compulsory portions that significantly constrained a testator's freedom to direct assets. Descendants held a compulsory portion equal to three-quarters of their statutory succession right. Parents were also protected heirs, entitled to one-half of their statutory share. Spouses were protected at one-half of their statutory share.
The 2023 reform introduced three targeted changes. First, descendants' compulsory portion fell from three-quarters to one-half of their statutory succession right (Art. 471 new CC). Second, parents' compulsory portions were abolished entirely (Art. 470 new CC). Third, spouses' compulsory portions remain unchanged at one-half.
As the Kellerhals Carrard analysis of the reform notes, "testators will be able to dispose freely of half of the assets of the estate" under the new regime, and the change is "particularly welcome to facilitate transmission of family businesses." (Kellerhals Carrard, Newsletter 3/2022)
A Mondaq analysis of the new law confirms the arithmetic directly: "The reduction of the compulsory portion can facilitate business succession in the case of family-run businesses."
Abstract fractions become concrete only when applied to a real estate structure. Consider a testator who leaves behind a spouse and two children. Under the old law, the freely disposable share of the estate amounted to three-eighths. Under the 2023 reform, that freely disposable share expands to one-half — a 33% increase in testamentary latitude, achieved without any change to the underlying statutory succession order.
Where a testator leaves a surviving spouse but no descendants, the freely disposable share rises from one-half to five-eighths.
For a family business owner, these are not marginal adjustments. They represent the difference between a succession plan that requires forced asset liquidation and one that can be designed around the operational and financial needs of the enterprise.
The structural tension at the heart of family business succession has always been straightforward to describe and difficult to resolve: a founder builds a company that represents the majority of family wealth, but has multiple heirs with differing relationships to the business. The child who has spent fifteen years in the business, learning its operations, relationships, and risks, faces the prospect of sharing legal ownership with a sibling who may have no involvement, no interest, and no patience for illiquidity.
Under the old compulsory portion rules, the inactive child's three-quarter entitlement frequently created a binary outcome: either the business was partially sold or liquidated to satisfy the claim, or the family entered protracted negotiation under legal duress. Neither outcome is conducive to business continuity or family cohesion.
The 2023 reform does not eliminate this tension, but it meaningfully shifts the planning landscape. A founder with one child active in management and one who is not can now direct the operational company to the active child, while using the expanded freely disposable share to fund a cash payment, investment portfolio transfer, or structured buy-out to the inactive child. The operating business survives the succession intact. The inactive heir receives fair compensation in a form suited to their circumstances. The arrangement reflects negotiated intent rather than legislated arithmetic.
This is precisely the kind of structured outcome that buyers, family offices, and M&A advisors value when evaluating acquisition targets or advising on pre-sale reorganisations. A business that enters a sale process with a clean, legally sound succession structure is a materially different asset from one where compulsory portion claims remain unresolved.
The reform's transitional dimension deserves particular emphasis. The new rules apply to all deaths occurring after 1 January 2023, regardless of when the underlying will or inheritance contract was drafted. This creates two categories of practical risk.
that reference the compulsory portion — for example, a clause directing that "descendants receive their compulsory portion" — now carry interpretive ambiguity. Does that language invoke the old three-quarter figure or the new one-half? The testator's intent may be clear in their mind but unenforceable without explicit drafting. Legal review is not a precaution; it is a necessity.
face a separate and arguably more significant change. Prior law permitted a testator to make gifts after signing an inheritance contract, unless the contract explicitly prohibited them or the gifts were abusive. The reform reverses this default: gifts made after executing an inheritance contract are now prohibited, unless the contract specifically reserves the right to give. Advisors working with clients who have signed inheritance contracts must audit those documents and, where ongoing lifetime disposability matters to the client, add explicit gift reservations before any planned transfers occur.
Two further refinements merit attention for advisors working with high-net-worth families.
Tied pension assets — pillar 3a savings and qualifying life insurance policies — no longer fall into the estate and pass directly to named beneficiaries. This resolves prior uncertainty about whether such assets were subject to compulsory portion claims. That said, their surrender value remains relevant for calculating the size of the estate against which compulsory portions are measured, and can be subject to abatement if other dispositions breach those portions. The distinction between ownership and valuation relevance is important and should not be conflated in planning documents.
On the spousal side, the reform clarifies the treatment of so-called "marital agreement benefits" — specifically, excess surplus participation granted to a surviving spouse under a participatory community property regime. Such benefits are now explicitly excluded from compulsory portion calculations for common descendants. This protects the surviving spouse from having their post-marital position eroded by the compulsory portion claims of children, a meaningful safeguard in blended family or complex marital property situations.
The reduction in compulsory portions makes inheritance planning for high-net-worth families and operating business owners substantially more tractable. The old three-quarter rule pushed many testators toward workaround structures: complex trustee arrangements, foundation structures, or constrained wills that left limited room for operational logic. The new one-half rule aligns more naturally with the planning instruments that family offices and wealth managers already employ, and reduces the frequency with which forced-heirship disputes disrupt carefully constructed succession plans.
For M&A advisors, the reform offers a more immediate benefit: it provides legal cover for testamentary structures that concentrate business control in a single heir while compensating others through non-operational assets. Sellers who previously resisted succession planning out of concern for disadvantaging non-active heirs now have a clearer path to structures that satisfy both operational and familial objectives.
This does not make succession planning simple. Families are complex, and the law, however reformed, is not a substitute for early, disciplined planning. But the 2023 revision removes a layer of rigidity that, for decades, forced outcomes that neither the law's architects nor the families themselves would have chosen if given a choice.
The Swiss inheritance law reform of 2023 is a technically precise intervention in a domain where precision matters enormously. It does not promise outcomes — no law can — but it substantially expands the range of outcomes that careful planning can achieve. For business owners, their advisors, and the buyers and family offices who evaluate family-held companies as acquisition candidates, understanding the reform's mechanics is now a baseline competency, not a specialised interest.
This post is a market observation and does not constitute legal or investment advice. Readers with specific succession planning questions should consult qualified Swiss legal counsel.
