What You Should Not Forget When Benefiting Your Cohabiting Partner!

Unmarried couples enjoy certain financial advantages over married couples, such as tax benefits and a higher AHV pension. However, cohabitation also has its disadvantages, which often only become apparent in the event of death. It is important to plan ahead! We are here to assist you!

The following statements do not claim to be exhaustive. They highlight the key aspects in which it makes sense for cohabiting partners to take proactive steps and make the necessary arrangements.

No Claim to Retirement Benefits

In the event of a divorce, both spouses are entitled to half of the retirement savings accrued in the second pillar during the marriage, provided that no pension case has occurred. If a pension case has occurred or the retirement savings cannot be divided for other reasons, there is a right to reasonable compensation. Cohabiting partners do not have comparable protection in the event of separation, which is particularly disadvantageous for the partner who has been less or not employed during the relationship to take care of children and/or the household.

Right to Visit and Right to Information in the Hospital

The right to information and visitation becomes an issue when the injured or ill partner is no longer responsive. Whether a cohabiting partner can obtain information from medical professionals and/or visit the partner is uncertain. This can be addressed with a power of attorney or a medical confidentiality waiver or an advance healthcare directive.

Representation of the Partner

Spouses can legally represent each other in ordinary matters of daily life. Limited representation is possible during stays abroad, hospitalizations, temporary incapacity, or lack of judgment that is not officially confirmed, etc. Cohabiting partners do not have a comparable legal right. Again, a power of attorney could provide a solution.

Representation in Case of Incapacity or Advance Directive

In the case of legally declared incapacity, spouses still have a limited right to representation by law. Typically, a professional guardian is appointed by the Child and Adult Protection Authority (KESB) in instances of incapacity, which is not always necessary for married couples. Cohabiting couples could appoint each other as representatives through an advance directive, allowing them to fully represent their partner in case of incapacity (provided the advance directive is validated by the KESB). The advance directive must be drafted either in handwritten form or in an officially notarized manner.

Widow/Widower’s Pension and/or Death Benefit

Spouses generally have the right to a widow’s pension from the first and second pillar and/or a capital benefit upon the partner’s death. Cohabiting partners do not automatically have this right. Most pension funds provide for the option to benefit a cohabiting partner in their regulations. Typically, a beneficiary designation will need to be submitted to the pension fund. The requirements and type of beneficiary designation may vary by pension fund. Generally, a written declaration is required, and some pension funds may require the insured person's signature to be certified, while others mandate that the declaration be submitted on a specific form provided by the pension fund.

Inheritance Law

Spouses have a legal right to inherit. Depending on the circumstances, they share the estate with the deceased's children or, in the absence of such, with the parental line (i.e., parents, siblings, and/or nieces and nephews of the deceased). Cohabiting partners do not have a legal right to inherit. Therefore, it is essential to make a legal provision to benefit the cohabiting partner. This provision can be made through a will or inheritance contract. A will can be handwritten or made with a public document, while an inheritance contract must be notarized. A will is not binding and can be revoked or amended at any time, while an inheritance contract is binding. In any case, when drafting the will and/or inheritance contract, the possibility of separation should be considered, as the legal benefit to the cohabiting partner does not automatically terminate upon separation, as it does for married couples in the case of divorce.

Would you like to optimally benefit your cohabiting partner? We are happy to advise you!

Luzern, November 18, 2020

Simeon Beeler