Definition
An advancement on inheritance occurs when the testator transfers part of the future inheritance to their descendants or other statutory heirs during their lifetime. This may involve, for example, a sum of money or a residential property. According to Article 626 of the Swiss Civil Code (ZGB), statutory heirs are mutually obliged to bring into account everything they have received from the testator as an advancement on their inheritance. This ensures equal treatment among the heirs.
Duty of Equalisation
According to Article 626 paragraph 2 ZGB, descendants of the testator must bring into account at the time of the division of the estate all benefits they have received as a marriage portion, equipment, transfer of assets, remission of debt or similar, unless the testator has expressly provided otherwise. The testator may therefore determine that a particular transfer is exempt from equalisation. In such cases, the amount is not charged to the heir’s share. However, the rules on compulsory portions must still be observed.
Protection of the Compulsory Portion
If the testator declares, for example in a will, that the beneficiary who received the advancement is exempt from the duty of equalisation, then this benefit is, in principle, not subject to equalisation. Such an exemption is only permissible, however, insofar as the compulsory portions of other heirs are not infringed. Even if an advancement that would normally be subject to equalisation is released from it, it remains subject to reduction under Article 527 no. 1 ZGB. The compulsory portion is calculated hypothetically by adding the lifetime transfer back into the estate (the compulsory portion calculation base). If the lifetime transfer ultimately infringes the compulsory portion of an entitled heir, that heir may bring an action for reduction, requesting that the advancement be reduced accordingly. In such a case, the favoured heir must repay the corresponding amount or have it offset during the division of the estate, in order to safeguard the compulsory portions of the remaining heirs.
The attorneys-at-law at Pilatushof AG are available to advise you, ensuring you are fully informed in matters of inheritance law and estate planning.