International succession: heirs abroad

Managing an estate involving heirs living abroad raises many complex legal issues under Swiss law. This situation, increasingly common in a globalized world, requires a thorough understanding of the rules of private international law and international conventions. Tax aspects, the determination of applicable law and the recognition of foreign decisions are all elements to be taken into account. This text examines the main issues and legal mechanisms relating to international successions in Switzerland, focusing on the rights and obligations of heirs residing outside Swiss territory.

Determining the law applicable to international succession

The first crucial step in handling an international succession in Switzerland is to determine the applicable law. Swiss law provides specific rules for this determination, which may vary according to the circumstances.

Basic principle: the law of the last domicile

In Swiss law, the fundamental principle is that succession is governed by the law of the deceased’s last domicile. This principle is set out in article 90 paragraph 1 of the Federal Law on Private International Law (LDIP). Thus, if the deceased was domiciled in Switzerland at the time of his death, Swiss law will apply to his entire estate, including assets located abroad.

Exceptions and choice of law

However, there are exceptions to this principle:

• The deceased may have chosen to submit his succession to his national law (art. 90 al. 2 LDIP). This choice must be made by will or contract of inheritance.
• For real estate situated abroad, the law of the place where the property is located may apply if the foreign state so provides (art. 86 al. 2 LDIP).
• International conventions may provide for specific rules, such as the Hague Convention of August 1, 1989 on the Law Applicable to Succession.

Impact on foreign heirs

Determining the applicable law has direct consequences for heirs living abroad. In particular, it will influence :

• Inheritance rights of heirs (reserved shares, order of succession)
• The formalities involved in asserting your rights
• Deadlines for accepting or repudiating an estate

It is therefore essential for heirs abroad to understand the law governing the succession, so that they can act accordingly and safeguard their interests.

Competence of Swiss authorities and recognition of foreign decisions

The question of jurisdiction is fundamental to international successions. It determines which authorities will be empowered to deal with the estate, and which decisions will be recognized in the various countries concerned.

Competence of the Swiss authorities

Under Swiss law, the competence of the authorities in inheritance matters is governed by articles 86 et seq. of the LDIP. The principles are as follows:

• If the deceased was domiciled in Switzerland at the time of his death, the Swiss authorities have jurisdiction over the entire estate (art. 86 al. 1 LDIP).
• If the deceased was domiciled abroad but of Swiss nationality, the Swiss authorities may be competent under certain conditions (art. 87 LDIP).
• For real estate located in Switzerland, the Swiss authorities have exclusive jurisdiction (art. 86 al. 2 LDIP).

Recognition of foreign decisions

The recognition in Switzerland of foreign decisions in inheritance matters is governed by article 96 of the LDIP. A foreign decision will be recognized in Switzerland if :

• It was issued by an authority competent under Swiss law.
• The decision is final and cannot be appealed.
• There are no legal grounds for refusal (e.g. violation of Swiss public policy)

Implications for foreign heirs

These rules of jurisdiction and recognition have significant implications for heirs living abroad:

• They may need to interact with Swiss authorities, even if they live abroad.
• They must be attentive to decisions handed down in other countries and their potential recognition in Switzerland.
• It may be in their interest to seek recognition in Switzerland of a foreign decision, in particular to facilitate the settlement of the estate.

The complexity of these rules may justify the services of a lawyer specializing in private international law, to guide heirs through the process and ensure that their rights are fully respected.

Tax aspects of international successions

Tax aspects are a major aspect of international successions. Taxation can have a considerable impact on the share actually received by heirs, which is why it is so important to understand the applicable rules.

Basic principles of estate taxation in Switzerland

In Switzerland, inheritance tax is mainly a matter for the cantons. Each canton has its own inheritance tax rules. Nevertheless, a few general principles can be identified:

• Tax is generally payable in the canton of the deceased’s last domicile.
• Tax rates vary according to the degree of kinship between the deceased and the heir
• Some cantons fully exempt direct heirs (children, grandchildren).
• Real estate is taxed in the canton where it is located.

Particularities for heirs abroad

Heirs living abroad are subject to special rules:

• They may be subject to double taxation if their country of residence also taxes the estate.
• Some cantons apply higher tax rates for heirs living abroad
• Double-taxation agreements may exist between Switzerland and the heir’s country of residence, modifying the taxation rules.

Double taxation agreements

Switzerland has signed double taxation agreements on inheritance with several countries. These agreements are designed to prevent heirs from being taxed twice on the same assets. They generally provide for :

• Rules for sharing the right to tax between states
• Mechanisms for eliminating double taxation
• Procedures for exchanging information between tax authorities

Tax planning strategies

Faced with the complexity of international tax rules, various planning strategies can be envisaged:

• Choosing the right place of residence for the deceased or heirs
• Use of appropriate legal structures (trusts, foundations)
• Living gifts to reduce the estate tax base
• Strategic distribution of assets between different jurisdictions

Foreign heirs are strongly advised to consult a tax expert familiar with international inheritance matters. This will enable them to optimize their tax situation while remaining within the legal framework.

Procedures and formalities for heirs abroad

Heirs living abroad must complete various procedures and formalities to assert their rights in an international estate involving Switzerland. These steps can be complex and require special attention.

Obtaining an heir’s certificate

The certificate of inheritance is a fundamental document in the Swiss inheritance process. For heirs abroad, obtaining one can present a number of particularities:

• The request must be addressed to the competent authority of the deceased’s last place of residence in Switzerland.
• Additional documents may be required to prove heirship (foreign civil status certificates, etc.).
• Certified translations of foreign documents are generally required.
• The process may take longer due to the international verifications required.

Acceptance or repudiation of the estate

Heirs abroad must be particularly vigilant regarding the time limits for acceptance or repudiation of the estate:

• The standard time limit under Swiss law is three months from the date on which the heir learns of the death.
• This period may be extended in certain circumstances, in particular for heirs living abroad.
• Repudiation must be made expressly to the competent authority.
• Acceptance may be tacit, which is why it is important to be cautious about actions relating to the estate.

Representation in Switzerland

To make the process easier, heirs abroad can choose to be represented in Switzerland:

• Appointment of an agent (lawyer, notary, trustee) to manage administrative and legal aspects
• Granting power of attorney to a co-heir residing in Switzerland
• Appointment of an executor by the deceased, who can act as an intermediary

Transfer of goods abroad

The transfer of estate assets abroad requires compliance with certain formalities:

• Obtaining the necessary permits from the Swiss authorities
• Compliance with exchange control and anti-money laundering regulations
• Coordination with financial institutions for the transfer of bank assets
• Consideration of the tax implications of a transfer to the heir’s country of residence

Dispute resolution

In the event of an inheritance dispute involving foreign heirs, several options are available:

• Mediation or conciliation, which can take place remotely
• Legal proceedings before the competent Swiss courts
• International arbitration, if provided for in a testamentary clause or agreed between heirs

The complexity of these procedures and formalities underlines the importance for heirs abroad of surrounding themselves with competent professionals. A lawyer specialized in international inheritance law can effectively guide them through these steps, ensuring that deadlines and legal requirements are respected.

Current implications of international successions

International successions involving foreign heirs raise complex issues that have a significant impact on legal practice and society in general.

Adapting the legal framework

Swiss inheritance law must constantly adapt to meet the challenges posed by the growing internationalization of family situations:

• Revision of national laws to take better account of cross-border situations
• Negotiation of new international agreements on inheritance matters
• Harmonization of rules at European level, with indirect implications for Switzerland

Evolving professional practices

Legal and financial professionals need to develop new skills to manage international estates effectively:

• Increased specialization of lawyers and notaries in private international law
• Development of international networks of professionals to facilitate cross-border estate management
• Increasing use of technological tools for remote management of estate procedures

Social issues

International successions raise broader societal issues:

• Tax equity between resident and non-resident heirs
• Protecting national cultural heritage from international transfers of goods
• Integrating different cultural conceptions of heritage into a coherent legal framework

Technological and safety challenges

Managing international estates poses new challenges in terms of technology and security:

• Securing international transfers of information and funds
• Digital asset management (cryptocurrencies, online accounts) in an international context
• Combating fraud and money laundering in cross-border successions

The role of specialized law firms

Faced with these multiple implications, the role of law firms specializing in international inheritance law is becoming increasingly crucial. These professionals are able to offer :

• Cutting-edge expertise in the legal and tax aspects of international successions
• A comprehensive approach that takes into account the specific characteristics of each family and asset situation
• Ability to navigate between different legal systems and coordinate international actions
• Personalized support for heirs throughout the succession process

Ultimately, the management of international estates with heirs abroad is a constantly evolving field, requiring constant legal monitoring and ongoing adaptation of professional practices. The issues raised go beyond the strictly legal framework to touch on broader economic, social and ethical questions, reflecting the challenges of an increasingly interconnected world.