An advance on inheritance is voluntary transfer of funds between testators and heirs while the all parties are alive. It provides a way, for example, for parents to offer their children financial support. An advance on inheritance must be set out in the will and with an appropriate settlement made, so other eligible heirs – mostly siblings and other family members – not left at a disadvantage.
Tax and legal implications
An advance on inheritance or a gift are generally taxable. However, the rules do vary from canton to canton.
Implications for mortgages
An advance on inheritance counts towards so-called ‘hard equity’. In other words, the bank counts the advance on inheritance towards the assets you have saved. This may entitle you to better terms when the mortgage is issued. Please note: an interest-bearing loan does not count as equity.