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Assets of Swiss nationals in the EU and inheritance law – how to solve? EU Inheritance Law Regulation…

Extract from: Génot, François (2014): “Commonplace 5”, www.francoisgenot.com

A Swiss citizen living in Switzerland owns assets in various EU states. He/she must take into account the provisions of the EU Inheritance Regulation (and his/her home law) for his/her inheritance planning. In particular, he/she should be aware of the possibility of a choice of law, among other things.

International wealth interdependencies make inheritance planning complex. You want to ensure that your own will as a future testator can actually be implemented.

Testator (Swiss citizen) lives in Switzerland with assets in the EU and Switzerland

If, for example, the future testator lives in Switzerland and owns assets in various member states of the European Union (EU) as well as in Switzerland, the following questions arise: The authorities of which state will be competent for the inheritance (international jurisdiction)? Which legal system will be applicable at all (applicable law) and may one possibly choose it oneself (choice of law)? The choice of law is of central importance, because the applicable law determines in particular who and how much someone will or can inherit. Depending on the national substantive law of succession, the scope for design varies considerably.

Property law before inheritance law … also in the EU

In the case of married testators, before the inheritance is determined, the matrimonial property regime must also be applied to testators in Switzerland, i.e. the dissolution of the property relationship in accordance with the rules of the chosen matrimonial property regime.

Applicable law, choice of law and jurisdiction as well as the EU Succession Regulation

Swiss law bases the question of jurisdiction and applicable law on the domicile of the testator. A foreign testator (resident in Switzerland) has the additional option of choosing the law of his or her home country. The last domicile refers to the place where someone resides with the intention of remaining permanently. This term is also not as clear as it seems. The place of residence in this sense does not necessarily have to be the place where one is officially registered. Here, too, various indications have to be taken into account. If the last residence of the deceased, who has assets abroad, was in Switzerland, Switzerland claims international jurisdiction over the worldwide estate and the (Swiss) authorities apply Swiss law. Nevertheless, in the case of existing foreign assets – namely those in the EU – the EU Inheritance Regulation must be taken into account. It also contains rules of jurisdiction for such cross-border situations. The potential for collisions and conflicts is almost explosive.

Thoughtful estate planning is indispensable in the case of internationally interwoven property relationships. If the testator (Swiss citizen) lives in France and has assets in Switzerland and the EU, the situation is different again (this constellation will be dealt with in more detail in a separate blog).

Prudent inheritance planning takes into account various scenarios as to how the will of the future testator can be implemented as well as possible and free of conflicts of jurisdiction. This involves more than just the (supposedly most important) question of who should inherit and how much. Whenever possible, the future testator should make a choice of law. The matrimonial property law or the property law in registered partnerships should not be disregarded.

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