In-depth guide · Succession
Cross-border estate planning: the EU, Switzerland and Liechtenstein
Updated: · Leutrim Miftaraj, FLIORE · Editorial standards · Other languages: Deutsch · Français · Español
Short answer
For families with links to several countries, jurisdiction and the applicable succession law come first. Since 2015 the EU has generally applied the law of the last habitual residence, with the option of choosing the law of one's nationality. Switzerland has its own rules in the PILA. Inheritance taxes follow separate rules and treaties. Without coordinated wills, choice of law and structures, conflicts and double taxation loom.
Three questions, considered separately
Cross-border estates raise three questions that are often mixed up: which authorities have jurisdiction? Which succession law applies – and therefore which forced heirship rules? Which state levies inheritance tax? For the same estate, the answers can point to different countries. Planning that answers only one of these questions is incomplete.
The rules at a glance
| Area | Basic rule | Choice of law | Particular feature |
|---|---|---|---|
| EU member states (excluding Denmark and Ireland) | Law of the last habitual residence (EU Succession Regulation) | Law of nationality | European Certificate of Succession |
| Switzerland | Jurisdiction and law at the last domicile (PILA) | Foreign nationals can choose their national law | Separate rules for Swiss nationals abroad |
| Liechtenstein | Its own private international law | Choice of law possible | Foundations and trusts widely used as estate planning tools |
Forced heirship and matrimonial property
The applicable succession law determines the forced heirship shares, and these differ markedly: in Switzerland, since 2023 the forced share of descendants has been half of their statutory entitlement; in Germany and Austria it is also half, but on a different basis of calculation and with different rules on taking earlier gifts into account. Matrimonial property law applies before succession law: first the marital property is divided, then it is inherited. For couples with links to several countries, the matrimonial property regime therefore belongs in the plan; in the EU, the Matrimonial Property Regulation determines which law applies.
Inheritance taxes: their own rules
Inheritance taxes do not follow succession law but have their own connecting factors – usually the residence of the deceased or of the heirs and the location of real estate. In Switzerland, inheritance taxes are levied by the cantons; spouses are exempt everywhere, direct descendants in most cantons. Germany levies inheritance tax and continues to tax German nationals without limitation for five years after they leave. Austria has not levied inheritance tax since 2008, and Liechtenstein levies no inheritance or gift tax. Germany and Switzerland have a treaty for the avoidance of double taxation on inheritances.
Worked example (simplified)
A German entrepreneur has lived in Switzerland for twelve years, his children live in Munich and Vienna, and a holiday flat is in Austria. Without a choice of law, from a Swiss perspective Swiss succession law applies at the last domicile. In his will he chooses his German national law, because his business succession plan is built on German law. For tax, he examines inheritance tax in Switzerland (cantonal), in Germany (because of his children as heirs resident in Germany) and the treatment of the Austrian flat. Will, marriage contract and shareholders' agreement are coordinated with each other and reviewed with advisers in both countries.
Planning in steps
- Record the links: nationalities, residences, habitual abode, location of assets.
- Determine jurisdiction and the applicable succession law for today's situation – and for foreseeable moves.
- Decide on a choice of law and record it validly in the will or a contract of succession.
- Clarify matrimonial property law and coordinate the marriage contract.
- Have inheritance taxes calculated for each country involved and under the treaties.
- Check structures such as foundations or trusts for their recognition and taxation in every country.
- Keep documents centrally, up to date and findable for the executor.
Structures in a cross-border estate
Foundations, trusts and companies change estate planning fundamentally, because the assets held in them no longer form part of the estate or are only inherited as a participation. This creates stability but raises questions. Are contributions to a foundation taken into account when calculating forced heirship shares? In many legal systems yes, under certain conditions and time limits. Is a trust recognised in the heirs' state of residence, and how is it taxed? This differs considerably between Switzerland, Germany and Austria.
And how do succession clauses in articles of association interact with the will? Diverging rules otherwise mean that heirs receive shares but cannot become shareholders. Estate planning that includes structures therefore needs the will, articles of association, foundation documents and marriage contract to be coordinated – and a review in every country concerned.
In FLIORE
FLIORE records residences, nationalities and tax residences per person, shows wealth per person and country with look-through across structures, and stores wills, marriage contracts and choices of law encrypted in the document vault – with deadlines for reviewing them.
At a glance
| EU | Law of the last habitual residence, choice of national law (Regulation (EU) No 650/2012) |
|---|---|
| Switzerland | Last domicile; foreign nationals can choose their national law (PILA) |
| Inheritance tax | Own connecting factors; DE–CH treaty; no inheritance tax in AT and LI |
Terms on this page
- Compulsory share
- The minimum share of an estate protected by law for close relatives, which cannot be removed by will.
- Tax residence
- The country in which a person is subject to unlimited tax liability because of residence, stay or other criteria.
Frequently asked questions
Does the EU Succession Regulation apply to Switzerland?
No, Switzerland is not an EU member. Swiss authorities apply the PILA. EU courts also apply the regulation where there is a link to Switzerland, for example with assets in the EU.
What is habitual residence?
A person's centre of life, assessed by the duration and circumstances of their stay. It can differ from tax residence, which can lead to unexpected results.
How is a choice of law made?
Expressly in a disposition of property upon death, in the prescribed form. In the EU the law of nationality can be chosen; Switzerland allows foreign nationals to choose their national law.
Does a German who moves to Switzerland still pay German inheritance tax?
German nationals remain subject to unlimited inheritance tax liability for the first five years after leaving; liability can also arise through heirs resident in Germany. The treaty with Switzerland governs the credit.
Are Liechtenstein foundations recognised everywhere?
Under civil law generally yes, but for tax they are treated very differently from country to country – sometimes as transparent, sometimes as a separate taxpayer. A review in every country concerned is needed.
How often should the plan be reviewed?
With every move, every change in family circumstances or change in the law, and otherwise every few years.
Are contributions to foundations taken into account for forced heirship?
In many legal systems, lifetime contributions can under certain conditions be added back or challenged when forced heirship shares are calculated. Conditions and time limits differ by country and should be checked in advance.
Where should wills be kept?
The original in a safe place that the executor can find – in Switzerland for example with the cantonal depository, in Germany in official custody at the probate court – and a copy in the encrypted document vault.
Sources
- Regulation (EU) No 650/2012 (European Succession Regulation) – EUR-Lex
- Swiss Federal Act on Private International Law (PILA/IPRG) – Fedlex
- Swiss Civil Code (ZGB, SR 210) – Fedlex
- German Inheritance and Gift Tax Act (ErbStG), section 2 – personal tax liability
- German Federal Ministry of Finance – double taxation treaties on inheritance tax
- Regulation (EU) 2016/1103 (Matrimonial Property Regulation) – EUR-Lex
This page provides orientation and does not replace legal or tax advice. The cited legal sources in their applicable version are authoritative.
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