International succession: heirs abroad

The management of an estate involving heirs residing abroad raises many complex legal issues under Swiss law. This situation, which is 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 the 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 related to international successions in Switzerland, with a focus on the rights and obligations of heirs residing outside Swiss territory.

Determination of the law applicable to the international succession

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

Basic principle: the law of the last domicile

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

Exceptions and choice of law

However, there are exceptions to this principle:

• The deceased may have chosen to submit his/her estate to his/her national law (art. 90 para. 2 LDIP). This choice must be made by will or inheritance agreement.
• For real estate located abroad, the law of the place where the property is located may apply if the foreign State provides for it (art. 86 para. 2 LDIP).
• International conventions may provide for specific rules, such as the Hague Convention of August 1, 1989, on the law applicable to successions.

Impact on heirs abroad

The determination of the applicable law has direct consequences for heirs residing abroad. In particular, it will influence:

• The inheritance rights of the heirs (reserved portions, order of succession)
• The formalities to be completed to assert their rights
• The deadlines to be respected to accept or repudiate the succession

It is therefore of the utmost importance for heirs abroad to fully understand which law governs the succession, in order to be able to act accordingly and protect their interests.

Jurisdiction of the Swiss authorities and recognition of foreign decisions

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

Jurisdiction of the Swiss authorities

Under Swiss law, the jurisdiction of the authorities in matters of succession 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 death, the Swiss authorities have jurisdiction over the entire estate (art. 86, para. 1 LDIP).
• If the deceased was domiciled abroad but of Swiss nationality, the Swiss authorities may have jurisdiction under certain conditions (art. 87 LDIP).
• For real estate located in Switzerland, the Swiss authorities have exclusive jurisdiction (art. 86 para. 2 LDIP).

Recognition of foreign decisions

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

• It has been rendered by a competent authority according to Swiss law
• It is final or can no longer be the subject of an ordinary appeal
• There are no grounds for refusal provided for by law (for example, violation of Swiss public policy)

Implications for heirs abroad

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

• They may have to interact with the Swiss authorities, even if they reside abroad
• They must be mindful of decisions handed down in other countries and their potential recognition in Switzerland
• It may be in their interest to request recognition in Switzerland of a decision handed down abroad, particularly to facilitate the settlement of the estate

The complexity of these rules may justify the use of a lawyer specialized in private international law to guide the heirs in their procedures and ensure that their rights are fully respected.

Tax aspects of international successions

Taxation is a major issue in international successions. Taxation can have a considerable impact on the share actually received by the heirs, hence the importance of fully understanding the applicable rules.

Basic principles of inheritance taxation in Switzerland

In Switzerland, inheritance taxation is mainly the responsibility of the cantons. Each canton has its own inheritance tax rules. However, some general principles can be identified:

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

Special rules for heirs abroad

Heirs residing abroad are subject to special rules:

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

Double taxation agreements

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

• Rules for the distribution of the right to tax between States
• Mechanisms for the elimination of double taxation
• Procedures for the exchange of information between tax administrations

Tax planning strategies

Given the complexity of international tax rules, various planning strategies can be considered:

• Careful choice of the place of residence of the deceased or the heirs
• Use of appropriate legal structures (trusts, foundations)
• Gifts during lifetime to reduce the inheritance base
• Strategic distribution of assets between different jurisdictions

Heirs abroad are strongly advised to consult a tax expert familiar with international successions. This will enable them to optimize their tax situation while remaining within the legal framework.

Procedures and formalities for heirs abroad

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

Obtaining the certificate of inheritance

The certificate of inheritance is a fundamental key in the Swiss inheritance process. For heirs abroad, obtaining it can present some peculiarities:

• The request must be addressed to the competent authority of the place of the deceased’s last domicile in Switzerland
• Additional documents may be required to prove the status of heir (foreign civil status documents, etc.)
• A certified translation of foreign documents is generally required
• The process may take longer due to the necessary international verifications

Acceptance or repudiation of the inheritance

Heirs abroad must be particularly vigilant with regard to the deadlines for accepting or repudiating the inheritance:

• The standard deadline under Swiss law is three months from the day the heir learns of the death
• This period may be extended in certain circumstances, particularly for heirs residing abroad
• Renunciation must be expressly made to the competent authority
• Acceptance may be tacit, hence the importance of being prudent in one’s actions relating to the succession

Representation in Switzerland

To facilitate the process, heirs abroad may choose to be represented in Switzerland:

• Appointment of an agent (lawyer, notary, fiduciary) to handle the administrative and legal aspects
• Granting of 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 assets abroad

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

• Obtaining the necessary authorizations from the Swiss authorities
• Compliance with exchange control and anti-money laundering regulations
• Coordination with financial institutions for the transfer of bank assets
• Taking into account the tax implications of the transfer in the heir’s country of residence

Dispute resolution

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

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

The complexity of these procedures and formalities highlights the advantage for heirs abroad of surrounding themselves with competent professionals. A lawyer specializing in international inheritance law can guide them effectively through these procedures, ensuring that deadlines and legal requirements are met.

Current implications of international successions

International successions involving heirs abroad raise complex and significant issues that have significant repercussions on legal practice and society in general.

Adaptation of the legal framework

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

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

Evolution of professional practices

Legal and financial professionals must develop new skills to effectively manage international successions:

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

Societal issues

International inheritance raises broader societal issues:

• Tax fairness between resident and non-resident heirs.
• Protection of national cultural heritage in the face of international transfers of property.
• Integration of different cultural conceptions of inheritance into a coherent legal framework.

Technological and security challenges

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

• Securing the international transfer of information and funds
• Management of digital assets (cryptocurrencies, online accounts) in an international context
• Combating fraud and money laundering in cross-border estates

Role of specialized law firms

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

• Specialist expertise in the legal and tax aspects of international inheritance
• A comprehensive approach that takes into account the specific characteristics of each family and asset situation
• The ability to navigate between different legal systems and coordinate international actions
• Personalized support for heirs throughout the inheritance process

Ultimately, the management of international inheritances with heirs abroad is a constantly evolving field, requiring permanent legal monitoring and continuous 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.