Inheriting Without Risk

Notary Office Beeler & Marbacher in Lucerne

Not all heirs are fortunate enough to inherit substantial assets. Often, there are estates that are insolvent, or where it is uncertain if anything will remain after debts and probate costs are paid. What options are available to clarify matters or reduce risk before deciding on whether to accept an inheritance?

Options

a) Each heir has the right to disclaim their inheritance without providing any justification. If the liabilities of an estate exceed its assets, the inheritance is considered insolvent. In such cases, all heirs typically disclaim the inheritance within the legal period of 3 months (from the date of death or the opening of the will). If the deceased was officially declared insolvent or obviously insolvent at the time of death, the law may presume a disclaimer. In these cases, an explicit disclaimer is not required but is generally advisable to prevent misunderstandings. Depending on the canton, the disclaimer must be declared to the probate or inheritance office or to the court.

b) If there is uncertainty regarding the estate’s net value, each heir may request the preparation of a public inventory before deciding on whether to accept or disclaim the inheritance. The public inventory must be requested within one month of the death, either from the court or the probate or inheritance office, depending on the canton.

c) The third option is to request official liquidation of the estate within the disclaimer period. This generally requires the consent of all heirs or a formal application. The requirements are similar to those for requesting a public inventory. In special cases (e.g., at the request of a creditor), the authorities may initiate official liquidation without the heirs’ objection.

If all heirs disclaim the inheritance, the estate will undergo liquidation by the bankruptcy office.

Consequences

a) By disclaiming the inheritance, a statutory heir forfeits their share, which then passes as if they had predeceased the decedent. If the disclaiming statutory heir has descendants, they assume the heir’s place. Minor descendants, if applicable, must also disclaim in a similar manner.

However, if an appointed heir disclaims without any alternative provisions in the will, their share passes to the decedent’s statutory heirs.

b) A public call for claims is issued with the preparation of the public inventory (listing both assets and liabilities). Based on the claims from public records, documentation, and information provided by the heirs, the responsible authority compiles the public inventory. Once the inventory is made available for inspection, each statutory or appointed heir must decide within one month whether to:

• Accept the inheritance under public inventory,
• Request official liquidation,
• Disclaim the inheritance, or
• Accept the inheritance unconditionally.

By accepting under public inventory, only the debts listed in the inventory transfer to the heirs. However, heirs are personally liable for these debts with both the inherited assets and their personal assets. Heirs remain fully liable for public debts (e.g., tax debts, social security contributions).

c) In the event of bankruptcy liquidation of an estate, the bankruptcy office conducts an inventory of assets and liabilities under the provisions of the Federal Debt Enforcement and Bankruptcy Act (SchKG). After all debts (including bankruptcy costs) are paid from the assets, any surplus is distributed to the statutory heirs. During this process, assets or claims are not necessarily transferred to third parties; disclaiming heirs may submit purchase offers to the bankruptcy office or, under certain conditions, claim benefits from insurance, occupational pensions, or other tied pension plans. Family members who lived with the decedent in the same household may, by law, claim certain essential items. Acquiring estate assets at a favorable price during liquidation may also be a viable option. In this case, only the purchase price, not the asset itself, is used to cover estate liabilities.

Please consult us if you are unsure about how to proceed or need advice on your rights.

Lucerne, September 3, 2021
Reto Marbacher