New Inheritance Law 2023: What actions should be taken concerning estate planning?

On January 1, 2023, the new inheritance law took effect. The new provisions apply to all estates of testators dying after December 31, 2022, regardless of the date of their will or inheritance agreement. What is changing and what does it mean for your estate planning? In this article, you will find an overview of the most important changes.

1. Smaller statutory entitlements for descendants and no statutory entitlements for parents

The most important change in the new inheritance law concerns the statutory entitlement law. The statutory entitlement is the share of the lawful part oft he inheritance that cannot be withheld from specific heirs. The statutory entitlement share of direct descendants has been reduced from ¾ to ½ of the lawful part oft he inheritance and the statutory entitlement of parents (previously ½ of the lawful part of the inheritance) has been completely eliminated. The statutory entitlement of the surviving spouse or registered partner remains unchanged at ½ of the lawful part of the inheritance. This means the following: If the testator leaves behind the spouse and descendants as heirs, he is now at full disposal of ½ of his estate (previously only 3/8). Consequently, he can mostly favor the surviving spouse by giving her ½ of the estate in addition to the ¼ compulsory portion. Thus, the surviving spouse receives ¾ and the descendants ¼. Or vice versa: ¾ goes to the descendants and ¼ to the surviving spouse.

The same applies if the testator leaves only descendants. The testator can then leave ½ (previously only ¼) of his estate to a charitable foundation, for example.

If, on the other hand, the testator leaves parents in addition to the spouse/registered partner, the testator can freely dispose of 5/8. This means that a testator can now freely dispose of at least ½ of his or her estate in any case and can, for example, give this half to an heir in addition or benefit a third party. 

The revised provisions apply to all inheritances after January 1, 2023 and will also apply to wills and inheritance contracts made earlier. It is therefore advisable to have your existing testamentary dispositions reviewed to ensure that they are up-to-date, correct and clear.

2. Higher inheritance quota in favor of the spouse and usufruct

Under current law, spouses with joint descendants have the option of allocating a maximum of ¼ of the estate to the surviving spouse for ownership and ¾ of the estate (which goes to the joint descendants) for usufruct. As a result of the amendments to the law on compulsory portions, the spouse can now be allocated half of the estate as an inheritance share and the other half as a usufruct.

3. Discontinuation of the protection of the compulsory portion of the spouse or registered partner in case of pending divorce proceedings

Until now, the spouse or registered partner lost his or her right to inheritance and compulsory portion only upon the existence of a legally binding divorce or dissolution decree. If a spouse or partner dies while divorce or dissolution proceedings are pending, the surviving spouse/partner now loses his or her entitlement to the compulsory portion if (a) the divorce proceedings were initiated at a joint request or continued at a joint request in accordance with the provisions on divorce or (b) the spouses/partners have lived separately for at least two years. However, in the absence of a corresponding testamentary disposition, the surviving spouse/registered partner retains, as before, his or her statutory inheritance entitlement until a final divorce decree or decree of dissolution has been issued. If the surviving spouse/partner is not to receive anything, a testamentary disposition is therefore necessary, with which the statutory inheritance share is also withdrawn.

4. Restriction of gifts after the conclusion of an inheritance contract
It should be noted in particular that new gifts are only possible to a limited extent after the conclusion of an inheritance contract. Dispositions upon death and gifts inter vivos - with the exception of customary occasional gifts - may be challenged if (i) they are inconsistent with the obligations under the inheritance contract and (ii) they have not been reserved in the inheritance contract.

It is therefore very important to provide in the inheritance contract whether and in what amount the testator may make gifts to descendants and/or to other persons after the conclusion of the inheritance contract. Existing inheritance contracts must therefore be reviewed and probably adapted in many cases.

5. Further clarifications on legal issues
The revised Inheritance Law then provides for a number of clarifications which answer controversial legal questions. These relate to the calculation of compulsory portions in the case of an over-half proposal allocation to the surviving spouse (see the article "Matrimonial property law: What should be considered?"), the order in which gifts are reduced, and benefits from pillar 3a (bank or insurance solution) that do not fall under the estate.

6. Further advice: creating clarity and avoiding uncertainties

The changes in the revised inheritance law will give the testator more flexibility and freedom in estate planning in the future. In order to make the best use of this and to create clarity regarding the interpretation of existing wills and inheritance contracts, we recommend that we review the existing estate documents with you.
We look forward to hearing from you.