Losing a loved one presents immense challenges. Beyond the emotional impact, you often face complex practical matters, especially with international assets. As a banking expert, I have guided many clients through the details of what happens when a foreign client of a Swiss bank passes away. This journey requires careful navigation, and I want to provide you with clear, expert insights.
You must understand how banks distribute assets. This process involves more than just Swiss domestic law. It includes a web of international private law, the laws of the deceased’s home country, and evolving banking regulations. My goal is to offer you a straightforward, expert perspective on this often-complex situation.
First Steps: Understanding Switzerland’s Legal Landscape
When a foreign national holding assets in a Swiss bank dies, grasp this first: Swiss bank-client confidentiality, while strong, is not absolute. International agreements like the Automatic Exchange of Information (AEOI) have increased transparency significantly. Banks diligently ensure compliance, directly impacting how they handle accounts of deceased foreign clients.
So, which legal frameworks apply? Primarily, Swiss domestic inheritance law and Swiss international inheritance law (codified in the Private International Law Act, or PILA) come into play. These laws determine who inherits and under which rules.
Swiss Domestic Inheritance Law: Who Inherits?
If Swiss domestic law governs the situation (PILA rules will determine this), you should know some core principles. Without a will, Swiss law dictates a statutory order of succession. Typically, the surviving spouse or registered partner inherits first, followed by children, then parents, and so on. Crucially, cohabiting partners generally have no statutory inheritance rights unless a will specifically includes them.
A key concept is “compulsory portions” (Pflichtteil). Swiss law protects close relatives, like spouses and children, by guaranteeing them a minimum share of the estate. Revisions to Swiss inheritance law, effective January 1, 2023, offer good news for estate planners by increasing testamentary freedom. For example, the law reduced the compulsory portion for children and abolished it entirely for parents. This change gives individuals more control over distributing their assets. However, I must stress that these new compulsory portion rules apply if the death occurred on or after January 1, 2023, even if the will was drafted earlier. I always highlight this critical point when clients review their estate plans.
The International Angle: Switzerland’s Private International Law Act (PILA)
For foreign clients, Switzerland’s Private International Law Act (PILA) is vital. PILA dictates which country’s law governs the succession and which authorities hold jurisdiction. Significant PILA revisions took effect on January 1, 2025. These changes aim to modernize the system and align it more closely with international norms, such as the EU Succession Regulation.
Generally, the deceased’s last domicile is the main connecting factor. If the deceased was last domiciled in Switzerland, Swiss authorities and Swiss law usually apply. If domiciled abroad, the foreign country’s authorities and laws (including their own conflict of law rules) typically take precedence. However, subsidiary rules exist. For instance, Swiss authorities might intervene if foreign authorities do not deal with assets located in Switzerland.
One interesting 2025 PILA update allows foreign nationals domiciled in Switzerland to choose their home country’s authorities to have jurisdiction over their estate. Swiss dual nationals also gain more flexibility in selecting which national law applies, although Swiss forced heirship rules often remain a key consideration. This area is complex, and in my experience, expert legal advice proves invaluable.
The Bank’s Response: Initial Actions After Notification
Once you formally notify a Swiss bank of a client’s death (usually with an official death certificate), the bank initiates several actions. From my banking expert perspective, these steps protect the assets and ensure they reach the rightful heirs.
Typically, the bank first freezes all accounts, deposits, and safe custody arrangements held in the deceased’s name. This is a standard protective measure. The bank also blocks associated bank cards and e-banking access and may suspend standing orders. While this can frustrate heirs needing immediate funds, it’s a crucial step to prevent unauthorized withdrawals. Banks might, at their discretion, permit payments for essential expenses like funeral costs, but they assess this on a case-by-case basis.
What about Powers of Attorney (POAs)? Under Swiss law, POAs granted by the deceased do not automatically expire upon death. However, banks usually restrict their use once notified of the death, pending the full legitimization of all heirs. Any single legal heir can typically revoke such a POA, which would also prompt an immediate account freeze. Therefore, relying on a POA for quick post-mortem access is often not a straightforward solution.
Proving Your Claim: Essential Documentation
As an heir, you must formally identify yourself. You also need to provide robust proof of your entitlement to the deceased’s assets. Meticulous documentation is absolutely critical here. Swiss banks conduct thorough checks for good reason: they must be certain they are releasing assets to the correct individuals.
Here’s a table outlining the standard documents you will likely need:
Table: Standard Documentation for Foreign Heirs
| Document Type | Key Requirements & Notes |
| Official Death Certificate | Original or officially certified copy. If foreign, it usually requires an Apostille or consular legalization. |
| Certificate of Inheritance / Grant of Probate | Official document identifying heirs and their shares (e.g., Swiss Erbenschein, foreign Grant of Probate, European Certificate of Succession). Must be apostilled/legalized if foreign, and translated if not in German, French, Italian, or English. Must be final and clearly evidence heirship. |
| Will(s) / Inheritance Contract(s) | Original or officially certified copy. Must be apostilled/legalized if foreign, and translated if applicable. Ensure it’s the final, valid will. |
| Valid Passports of All Heirs | Clear copies, potentially certified by a notary or the bank. Current, valid identification is essential for all heirs. |
| Proof of Relationship (for statutory heirs) | E.g., apostilled/legalized birth/marriage certificates, family registers. Needed if heirship is based on intestacy rules. Certified translations required. |
| Tax Compliance Information | Banks may request this (e.g., tax ID numbers, declarations on the tax status of assets). Increasingly important due to AEOI and AML regulations. |
| Bank Forms | Specific forms provided by the Swiss bank for account closure, asset transfer, and heir identification. Complete accurately; all heirs may need to sign. |
The Hurdle of Foreign Documents: Authentication
I often see significant delays at this stage. Foreign public documents require proper authentication. If your country is a signatory to the Hague Apostille Convention, an Apostille is usually necessary. This standardized certificate verifies the document’s origin. If your country is not a signatory, a more complex consular legalization process is typically required.
Furthermore, you will usually need certified translations for documents not issued in German, French, Italian, or often English. Swiss banks and authorities meticulously scrutinize these foreign documents. They check for authenticity and ensure the documents clearly establish the heirs’ identities and entitlements. Authorities may refuse recognition if a foreign document is manifestly incompatible with Swiss public policy (for example, due to discriminatory inheritance rules) or if procedural flaws occurred during its issuance.
Asset Distribution: The Importance of Unanimity
Once the bank validates all documents and confirms the heirs’ legitimacy, the asset distribution process can start. I always stress a critical point: Swiss banks require unanimous agreement and joint instruction from all legally recognized heirs before distributing assets or closing accounts. If even one heir disagrees, is uncooperative, or cannot provide consent, the bank will typically maintain the freeze on the assets. This “unanimity rule” can be a significant practical hurdle. A single dissenting heir can paralyze the distribution, potentially forcing others into lengthy and costly legal proceedings.
Banks do not act as estate executors (unless specifically appointed, which is rare) nor do they mediate disputes among heirs. Their role is to execute valid and unambiguous instructions once they clearly and legally establish heirship and the collective will of the heirs.
Heirs must collectively provide the bank with clear, written, and jointly signed instructions for the assets’ disposition. These instructions must precisely specify how and to whom the bank should transfer the assets, including recipient account details. I often share a practical tip: while banks must follow legitimate instructions, heirs indicating a desire to maintain a relationship with the bank might sometimes find the process smoother than those demanding an immediate full withdrawal to a foreign institution.
Understanding Joint Accounts
The treatment of joint accounts after one holder’s death critically depends on the account’s specific contractual terms. For “and/or” accounts (where holders have joint access), the surviving partner can often continue to dispose of the assets individually. In such cases, the deceased’s other heirs are typically entitled to information about the account’s assets up to the date of death. However, they may not have immediate disposal rights over all funds if the account agreement grants the survivor full control.
Finding Lost Treasures: Dormant Accounts in Switzerland
What if you believe a deceased relative had a Swiss account, but you are unsure which bank or even if one exists? Switzerland has a well-defined system for “contactless” and “dormant” accounts.
Banks consider assets “contactless” if they lose touch with the customer. Assets become officially “dormant” after 10 years of no contact. Banks must try to locate owners or their legitimate heirs and protect these assets.
The Swiss Banking Ombudsman plays a crucial role here. Since 1996, heirs can inquire with the Ombudsman if they believe assets exist but do not know the specific bank. You will need to provide credible proof of your potential entitlement, such as the deceased’s death certificate and documentation proving your heirship. If the Ombudsman finds assets, they contact the bank, which then conducts its own final verification of your legitimacy.
After 60 years of no contact, banks must publish details of assets exceeding CHF 500 (or safe deposit boxes) on www.dormantaccounts.ch. Claimants then have a limited time (usually one year) to come forward. If no legitimate claim is made, the banks transfer these assets to the Swiss federal government, and all claims become void. This system aims to reunite assets with rightful owners but imposes definitive deadlines.
Tax Implications: What Foreign Heirs Must Consider
Tax implications are a major concern for foreign heirs. You need to consider potential taxes in both Switzerland and your country of residence.
Swiss Inheritance Tax: Generally Not on Bank Accounts of Non-Residents
First, some good news: Switzerland imposes no federal inheritance tax. Cantons handle inheritance and gift taxes, so laws, rates, and exemptions vary significantly. Some cantons, like Schwyz, levy no inheritance or gift tax at all.
Crucially for many foreign heirs, if the deceased was not resident in Switzerland, Swiss cantonal inheritance tax generally does not apply to movable assets like bank account balances or securities. The inheritance tax liability for such assets typically arises in the deceased’s country of last domicile or the heir’s country of residence. This is a key reason banks are increasingly concerned about the tax compliance of such assets in foreign jurisdictions. However, if the non-resident deceased also owned Swiss real estate, that specific asset will be subject to cantonal inheritance tax in the canton where the property is located.
Even when Swiss inheritance tax applies (for example, to Swiss residents), spouses and direct descendants are often exempt or benefit from very low tax rates in most cantons.
Swiss Federal Withholding Tax: A Potential Refund Awaits
Switzerland levies a 35% federal withholding tax (Verrechnungssteuer) on certain Swiss-source investment income. This includes dividends from Swiss companies and interest from Swiss bank deposits. The bank deducts this tax at source.
However, foreign resident heirs who receive such income may be entitled to a partial or full refund of this 35% tax if their country of residence has a comprehensive Double Taxation Agreement (DTA) with Switzerland. The DTA typically allows Switzerland to retain a reduced rate (e.g., 15%, 10%, 5%, or 0%). You can reclaim the difference.
You submit refund claims to the Swiss Federal Tax Administration (SFTA). You will typically use Form 60 or a country-specific SFTA-approved form. For income accrued to an estate before its formal division, the process requires careful attention. Foreign resident heirs usually apply individually for their share of the refund using the DTA forms relevant to their country. You must provide official proof of your status as an heir, your specific percentage share of the estate (your Erbquote), and your tax residency. Generally, you must file withholding tax refund claims within three years from the end of the calendar year in which the income became due. This reclaim process is detailed and demands meticulous preparation.
Navigating Challenges and Costs
The inheritance process involving Swiss bank assets can present numerous challenges. It often comes with significant costs and extended timelines.
Disputes among heirs represent one of the most significant hurdles. Disagreements can arise over will validity, interpretation, heir identification, or inheritance shares. If heirs present conflicting foreign inheritance documents, Swiss banks will almost invariably freeze the assets. They will await either a unanimous, legally binding agreement or a definitive Swiss court order. Banks do not adjudicate these disputes.
Obtaining and authenticating foreign documents to Swiss standards can be lengthy, bureaucratic, and expensive. Even with seemingly complete documentation, banks’ internal compliance procedures, AML checks, and risk assessments can cause processing delays.
A major complication arises if the deceased held undeclared assets (“black money”) in the Swiss account. Inheriting such funds can expose heirs to severe tax penalties and even criminal prosecution in their home jurisdictions. Swiss banks, operating under AEOI and stringent AML regulations, are acutely aware of this risk. They will be extremely cautious. They may require heirs to provide evidence of the tax compliance of the inherited funds or undertake a voluntary disclosure process in their home country before releasing assets. Language barriers and understanding Swiss procedures can also be daunting without professional local assistance.
Understanding the Costs Involved
Claiming an inheritance from a Swiss bank can involve various costs. These can accumulate significantly, especially in complex or contested cases.
- Legal Fees: Engaging Swiss lawyers specializing in international inheritance law is often indispensable. Fees typically depend on hourly rates.
- Notary Fees: You will incur fees for notarizing documents in Switzerland.
- Court Fees: If legal proceedings are necessary, court fees will apply, generally based on the estate’s value or the amount in dispute.
- Translation and Authentication Costs: Certified translations and Apostilles or consular legalizations for foreign documents can be substantial.
- Bank Fees: Swiss banks may charge for specific services related to administering a deceased client’s account.
The Swiss Banking Ombudsman’s services for inquiries and dormant account searches are generally free for claimants.
My Expert Recommendations for a Smoother Process
Drawing from my experience helping families navigate these complex situations, I offer the following advice:
- Seek Specialist Advice Early: Do not delay. Engage experienced Swiss lawyers and tax advisors who specialize in international inheritance law and cross-border estate settlement as soon as possible. Their expertise can prove invaluable.
- Communicate Proactively and Formally with the Bank: Notify the Swiss bank of the client’s death promptly and formally. Maintain clear, documented communication throughout.
- Prepare Documents Meticulously: Systematically gather all necessary personal and legal documents. Pay close attention to certification, Apostille or consular legalization, and certified translation requirements for all foreign documents.
- Ensure Coordinated Action Among Heirs: If multiple heirs are involved, strive for unanimous agreement. Provide joint instructions to the bank. Designating one spokesperson or legal representative can streamline communication. This is often the most efficient path.
- Address Tax Compliance Proactively: Investigate and address any potential tax irregularities concerning the inherited assets. This applies to Swiss withholding tax and inheritance/income tax obligations in the heirs’ countries of residence. If you suspect undeclared assets, seek advice on voluntary disclosure procedures in the relevant jurisdictions before banks report assets under AEOI.
- Exercise Patience and Persistence: The international inheritance process, especially one involving different legal systems and languages, can be inherently lengthy. Prepare for a process that may take many months, or even years in contentious cases. Maintain methodical follow-up.
Conclusion: Your Path to a Clear Resolution
The death of a foreign client with assets in a Swiss bank undoubtedly triggers a legally and administratively intricate process for their heirs. Successfully navigating this requires you to clearly understand several key areas. These include the interplay between Swiss domestic inheritance law and Swiss international private law (PILA). You must also grasp the specific procedures and stringent documentation requirements of Swiss banks. Finally, understanding the relevant Swiss tax implications is crucial.
Critical challenges often include delays in obtaining and authenticating foreign legal documents to Swiss standards. The potential for disputes among heirs can lead to account paralysis until all parties reach unanimity or a court issues an order. Ensuring the tax compliance of inherited assets, particularly in the current era of Automatic Exchange of Information, is also increasingly important. Costs can be substantial, encompassing Swiss legal and notary fees, court fees if litigation becomes necessary, translation and authentication expenses, and ongoing bank administrative charges.
My paramount recommendation for foreign heirs is to seek specialist Swiss legal and tax advice at the earliest opportunity. Professional guidance is essential for you to correctly interpret the applicable legal frameworks. It helps you prepare the necessary documentation meticulously, manage communications with the Swiss bank effectively, and address any tax compliance issues proactively. A coordinated approach among all heirs, aiming for unanimous instructions to the bank, will significantly expedite the process. While the Swiss system provides clear pathways for legitimate heirs to claim assets, including mechanisms for searching for dormant accounts, the journey can be complex. It demands diligence, patience, and expert support from professionals like myself to help you achieve a successful and lawful outcome.
