Liberty News - Proper inheritance needs to be learned

The majority of Swiss people only inherit when they themselves reach retirement age. Advance inheritance withdrawals could change this, but only one in seven people make use of this option. Many families avoid discussing inheritance issues altogether.

According to estimates, the total volume of inheritances due to death in Switzerland amounted to CHF 88 billion last year. If this sum were distributed equally to all 8.8 million inhabitants of the country, each person would receive CHF 10'000. However, the volume of inheritance in Switzerland is very unevenly distributed, including in relation to the age of the beneficiaries. Thanks to increasing life expectancy, most people only inherit when they themselves have already reached retirement age, according to AXA's 2023 pension study. Only around one in 10 people living in Switzerland and under the age of 60 has already inherited because of a death.

The older population is often financially well off

Financially intensive projects are often planned earlier in life: «Many major expenses, such as buying a house, further education, or the costs of children, are incurred at a young or middle age, when there is often not much in savings. Depending on the situation, the project may have to be postponed for a few years», says Kume Hasani-Ferati, Head of the Zurich Pension & Wealth sales region at AXA Switzerland. Many older people, on the other hand, are in a good financial position: «From around the age of 55, assets accumulate because most debts have been paid off, personal expenses are reduced and inheritances or pension fund assets may be added at the same time.»

The data from the AXA pension study shows the increase in assets over the course of a lifetime in exemplary fashion: while only just under 14% of people under the age of 30 have assets of over CHF 250'000, the figure for 60-65-year-olds is around 48%.

Death and finances are taboo subjects

In many cases, an early advance withdrawal or a gift to the younger generation could therefore make sense, advocates Kume Hasani-Ferat. According to the AXA pension study, however, this does not happen that often: only one in seven people surveyed (15%) said they had already received an advance withdrawal. «One of the reasons for this is probably that the topic is still not talked about enough», suspects Kume Hasani-Ferati. The AXA pension study confirms this: over a third of all families have never discussed the topic of inheritance at all, and a further quarter only in passing. This may be because the topic does not yet seem pressing, because the respondents believe that their parents should address the issue because there is little money either way - or because it is simply unpleasant to talk about the death of loved ones.

Open discussion can avoid disputes

«Two taboo subjects come together: money and death. However, if there is no discussion within the family about inheritance and the financial situation of the parents, this makes it more difficult for the younger generation to find possible solutions for financial projects», Kume Hasani-Ferati points out. She therefore recommends seeking an open discussion at an early stage - the impetus for this should come from the younger generation - especially if they have financially costly plans. «There are many good reasons to talk openly about inheritance issues and the financial situation in the family. On the one hand, parents can clarify their wishes for the time after their death, which can avoid some uncertainties or even disputes within the family. On the other hand, early redistribution of assets between the generations can be discussed - so that any financial blessing for the children does not only come when they no longer urgently need it. For concrete planning, it is worth consulting a financial planning professional», concludes Kume Hasani-Ferati.

About the study

AXA has been conducting a comprehensive study on pension provision in Switzerland every year since 2019. In 2023, the topic was inheritances. The representative online survey was conducted between March 23 and April 3, 2023 among 1018 people aged between 18 and 65 from German-speaking and French-speaking Switzerland using the Intervista online panel.