How to protect your partner or partner in the event of death?


Estate distribution

There is obviously no liquidation of the matrimonial regime since there was no marriage. The assets of the deceased (excluding 2nd pillar and linked 3rd pillar) thus fall entirely within the estate. In this division, if the deceased leaves no spouse but only descendants, the latter will no longer be able to claim from next January 1 only a reserved share of half, against three quarters still currently.

Taxes are very heavy in the canton of Vaud and Geneva

It seems obvious that, if the revision of the law is much more favorable for the surviving cohabitants or concubines, this part of the inheritance will be subject to inheritance tax. This tax is particularly heavy in Geneva and in the canton of Vaud, up to 54,6% and 50% respectively. Let's take an example. A man residing in Montreux had two children from a marriage that ended in divorce. He got back into a relationship without remarrying. When he died, he had an estate of 500 francs. He could have planned in his will to leave half of his fortune to his concubine, ie 000 francs, using all the available portion. She would then have had to pay inheritance tax of 250%, or 000 francs.

Duration of cohabitation often taken into account

It is clear that the cantons have different policies with regard to the tax rates for cohabitants. Some cantons have much higher rates than others, which is unfair. Fortunately, some cantons allow cohabiting couples to benefit from more advantageous tax rates if they can prove that they have lived together for a certain period of time. It is a good thing that the cantons take into account the duration of cohabitation in their calculation of tax rates, because it allows couples to benefit from a fairer rate.

Is it advantageous to change residence?

For cohabiting couples who are very sensitive to inheritance tax issues, it may be advantageous to domicile their assets in cantons with more lenient tax treatment. This is particularly true if one is established in Geneva or in the canton of Vaud. However, there is another possibility to reduce the future tax burden related to real estate, because real estate is taxed according to its location.

There are also different solutions to give priority to your partner in order to reduce your tax bill and/or avoid reduction actions in the context of provident insurance, with the 2nd pillar according to the rules of your fund. pension, by taking out linked 3rd pillar products or free 3rd pillar products in the case of pure risk insurance.

What does the mandatory pension say?

Cohabitants are not taken into account in the context of the AVS, but in the context of the 2nd pillar, it depends on the regulations of the provident institution. Indeed, many provident institutions consider cohabitants as married spouses and grant them the same rights in the event of death, especially if they have lived together for more than five years. Pension funds often require that the insured send them a beneficiary clause in favor of their partner during their lifetime.

Is it relevant to make LPP buybacks

One may wonder whether redemptions would not be particularly interesting if one seeks to improve the coverage of the cohabiting partner or the concubine in the event of death. This could arguably be a bad idea, since the vast majority of pension funds resort to the primacy of benefits to cover risk, in particular death, i.e. the benefits linked to it depend only on the salary. assured. Additional contributions, in the form of redemptions, would thus have no effect on the benefits paid.


Pure risk death insurance

Pure risk death insurance is an ideal solution for cohabiting couples, whether taken out in the linked or free 3rd pillar. The capital of the life insurance is paid to the designated beneficiary in the event of death, without risk of suffering a reduction action. This is possible because, as it is insurance without surrender value, no amount can enter into the calculation of the reserved parts.


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