The succession pact is a contract concluded between the future deceased and one or more other parties, by which succession provisions are agreed upon mutually. Governed by art. 512 to 536 CC, it is fundamentally distinguished from a will by its contractual and in principle irrevocable nature. It is the tool par excellence for anticipatory succession planning: it allows the transfer of a family business to be secured, a life partner to be protected, or the distribution of a complex real estate estate to be organised. PBM Avocats in Geneva and Lausanne drafts and negotiates tailor-made succession pacts.
Forms of Succession Pact (art. 512 CC)
Art. 512 CC imposes an authentic form for the validity of the succession pact. The procedure is identical to that of a public will:
- Presence of a competent public official (notary or civil registrar depending on the canton);
- Presence of two witnesses at the time of signing;
- Signature of all parties to the pact, the public official and the witnesses;
- Declaration by all parties that they have read and approved the content of the pact.
A succession pact concluded by simple private deed is null and void. The authentic form is a condition of validity, not merely of proof.
Types of Succession Pacts
Swiss law recognises two main categories of succession pacts:
| Type | Content | Example of use |
|---|---|---|
| Positive pact (institution) | The disposer undertakes to leave an asset or a share to a specific person | Guaranteeing the inheritance of a family home to a child |
| Negative pact (waiver) | An heir waives all or part of their succession rights | Waiver by a child of their reserved share against a balancing payment made during the disposer's lifetime |
| Mixed pact | Combination of liberalities and waivers | Business transfer with balancing payment to other children |
The Succession Waiver Pact (art. 495 CC)
The succession waiver pact is the instrument by which a prospective heir waives, during the lifetime of the future deceased, their succession rights, whether gratuitously or against payment of a balancing sum. The effects are as follows:
- The renouncing party loses their succession rights (including their reserved share) as if they had predeceased the deceased, unless otherwise stipulated;
- In the event of total waiver, the descendants of the renouncing party are also excluded, unless otherwise stipulated;
- The balancing sum paid is subject to the rules on hotchpot if it constitutes an advance on inheritance;
- On the tax front, the balancing sum may be subject to gift tax depending on the canton.
The Succession Pact for Business Transfer
The succession pact is particularly valuable in the context of family business succession. It allows notably:
- Assigning the business to a successor heir irrevocably, avoiding the uncertainty of a will;
- Agreeing on a business attribution value in advance, avoiding valuations and contestations at the time of death;
- Providing a continuation clause: if the business is transferred to a third party during the disposer's lifetime, the proceeds are shared among heirs according to predefined rules;
- Ensuring the confidentiality of succession arrangements vis-à-vis third parties (clients, banks, competitors).
Coordination with tax law is indispensable: inheritance taxes, the taking over of assets at book value or market value, and any real estate capital gains taxes in the event of a property transfer within the succession framework must be anticipated.
Revocation of the Succession Pact (art. 513 CC)
The succession pact is unilaterally irrevocable. It may only be modified or revoked:
- By mutual agreement of all parties, passed in the same authentic form;
- By a new succession pact between the same parties;
- In the cases expressly provided for by law or the pact itself;
- In the event of seriously immoral behaviour by the beneficiary party (by analogy with disinheritance).
After the conclusion of a succession pact, the disposer retains the freedom to dispose of their assets during their lifetime (sale, donation). However, they cannot conclude acts whose sole purpose is to frustrate the beneficiaries of the pact, under penalty of an action for damages. Consult PBM Avocats to structure a succession pact adapted to your situation, notably in coordination with your tax planning.
Frequently Asked Questions on Succession Pacts in Switzerland
What is the difference between a will and a succession pact?
A will is a unilateral and revocable act: the testator may modify or revoke it at any time without anyone's agreement. A succession pact is a bilateral or multilateral contract: once concluded, it may only be modified or revoked with the agreement of all parties (art. 513 CC). This relative irrevocability is the main advantage of the succession pact: it creates contractual certainty that a will alone cannot offer. In return, it limits the future freedom of the disposer.
Who may be a party to a succession pact in Swiss law?
The succession pact is concluded between the future deceased (the disposer) and one or more other parties. The disposer may be any person having testamentary capacity (18 years of age, capacity of discernment). The other parties may be the heirs themselves (to agree on their waiver), a legatee (for an irrevocable post-mortem liberality), or a third party (for a contractual institution of heir). The presence of a public official and two witnesses is mandatory for formal validity.
Can a succession pact be unilaterally terminated?
In principle no, this is the fundamental difference from a will. A succession pact may only be revoked by mutual agreement of all parties, passed in the same authentic form (art. 513 CO). However, if the person bound by the pact concluded it for reasons relating to the person of the other party, and if the behaviour of that person constitutes just cause for termination (similar to just cause in contract law), judicial termination may be envisaged in exceptional cases.
How is a succession pact used for a business transfer?
The succession pact is a powerful tool for family business transfer. It may provide for: (1) the waiver by the other heirs of their share in the business (often against a balancing payment in cash or other assets); (2) the contractual attribution of the business to a successor heir from the time of death; (3) clauses for maintaining the value of the business until transfer; (4) a predefined valuation of the business to avoid subsequent contestations. PBM Avocats structures these transactions in coordination with the tax and company law aspects.
Is the succession pact enforceable against the creditors of the deceased?
In principle, the obligations arising from a succession pact are succession obligations and do not create direct claims against the disposer's estate during their lifetime. However, if the pact provides for significant liberalities, the creditors of the deceased may contest these attributions on the basis of the paulian action (art. 285 ff DEBA) if they were made in fraud of their rights. Furthermore, contractual attributions may influence the calculation mass of the statutory shares and be subject to a reduction action if they prejudice the reserved shares.