Planning Gifts and Advance Inheritance Correctly
Why wait until it's too late? With gifts and advance inheritances, you can support your descendants today.
Support at the Right Time
Children often need financial help exactly when they want to start a family or acquire property – not decades later. But a simple transfer can later lead to major disputes if it's not clearly regulated whether the money counts as a gift or as an accountable advance inheritance. Without a written agreement, the statutory equalization obligation applies, which can lead to nasty surprises years later.
Expert Tip: The Equalization Obligation. In Switzerland, legal heirs (such as children) must equalize everything they have received as an advance inheritance, unless the testator has specified otherwise. To avoid envy and disputes, a written contract should specify whether the contribution must be credited in the later estate division or not.
Utilizing Tax Advantages
Gifts can also be a smart tax strategy:
- Use exemptions: Many cantons grant generous exemptions for gifts to direct descendants.
- Break progression: By reducing your assets early, you lower your own annual wealth tax.
- Property transfer: Transferring a property in exchange for usufruct or right of residence is a classic model for organizing the estate early.
Checklist for Gifts and Advance Inheritances
- Define purpose: Should the money be used for a specific goal (e.g., house purchase)?
- Check equal treatment: How are other siblings or heirs considered?
- Regulate usufruct: Should a right of residence be registered in the land register for real estate?
- Written contract: Have the conditions (creditability, value at time of allocation) been fixed?
Conclusion
Those who give with "warm hands" see the joy of the recipients and ensure orderly conditions.
Author
Adis Kavazovic
Head of Insurance & Financial Planning
Personal Consultation
Our experts help you with your individual questions.