Bank transactions in the event of death – what do you need to do?

In the event of a person’s death, their heirs should ensure they gain an overview of the entire inheritance. If liabilities such as debts and mortgages are higher than assets, we recommend relinquishing the inheritance at the relevant office within the statutory period. Generally, the inheritance office is the testator’s last place of residence.

Otherwise, the heir(s) can either inform the relevant office that they are accepting the inheritance or allow the statutory period to elapse and thus automatically accept the inheritance.

Once they have accepted the inheritance, the heir(s) take on the deceased’s rights and obligations. This also applies to all bank accounts, custody accounts and other financial matters. It is important that banking transactions are processed quickly and properly after the death to prevent misuse and safeguard the interests of the community of heirs.

What happens to a bank account in the event of death in Switzerland?

Upon the death of a bank customer, the deceased person’s heirs become the legal successors. They make up the community of heirs and must make joint decisions regarding the estate, unless all heirs collectively appoint a representative.

Early notification of the bank

The bank should be informed immediately upon the death of the person in question. Only then can the bank secure the account and protect it against unauthorized access. You are best advised to get in touch with the bank(s) by phone so they can tell you how to proceed. Additionally, you should have a copy of the death certificate at hand.

Blocking of the bank accounts

Not all banks block accounts once a death has been reported. In case of doubt, heirs without power of attorney can verify their identity with an official document, such as ID showing their registered marital status.

By doing so, they can instruct the bank to block all the testator’s accounts, or at least to find out who has power of attorney over the accounts, or whether the accounts will or have been blocked.

Incoming payments are still possible, but outgoing payments, such as standing orders and direct debit orders, are stopped under some circumstances. You should therefore enquire with your bank how it will handle payment transactions for the accounts concerned.

Important

For joint accounts with sole power of disposition (“Or” accounts), the surviving account holder can, depending on the bank, continue to access the account but possibly not all of the assets, as the deceased person’s share is part of their estate. Accounts with joint power of disposition (“And” accounts) remain blocked until the estate is settled.

Urgent payments in the event of death

Hospital and funeral costs, rental payments and other urgent expenses can be paid from the estate. The bank checks these payments using receipts to prevent any errors or fraudulent transactions. 

Access to safe deposit boxes

Safe deposit boxes are a popular storage location for important documents. However, access to them is heavily restricted in the event of death. Only an executor or the entire community of heirs may be granted access upon presentation of the necessary documents.

The role of the community of heirs

If they accept the inheritance, the community of heirs assumes the deceased’s rights and obligations. This means they not only manage assets such as real estate or bank deposits, they also have to settle current obligations such as debts or outstanding invoices. If the community of heirs relinquishes the inheritance, the heir’s business relationships are dissolved by the bankruptcy office.

Rights and obligations

The community of heirs or each individual heir is entitled to receive comprehensive information about the estate from the date of death. They must prove their entitlement by providing the relevant documents, such as ID showing the heir’s registered marital status, the heir’s birth certificate, a certified copy of the will or the heir’s certificate.

The heirs are also obliged to take joint decisions. Any disagreement amongst the heirs may delay the settlement of the estate. International estates or estates with outstanding mortgages require additional legal and financial clarification.

How to avoid conflicts

Disagreement amongst the heirs over the estate can trigger serious conflicts. Structured estate planning, open communication and appointing a representative for the community can prevent arguments and ensure the estate is settled in line with the deceased’s wishes.

Find out what to bear in mind when planning your estate in our blog post «Estate planning: assume responsibility, shape the future».

How long does it take to settle an estate?

Settling an estate can take from three months to as long as several years, depending on the circumstances. In the case of straightforward estates, such as those with no real estate or international assets, it is realistic to expect settlement to take six to 12 months. More complex cases, such as estates with outstanding debts or an international element, can last much longer.

Costs of estate settlement

Swiss banks may charge fees for settling the estate. Some institutions charge monthly dossier management fees if settlement takes longer than a certain time, generally 12 to 15 months. Additionally, other costs may be incurred for specific services, such as checking inheritance documents, managing securities or confirming heirs. The size of these fees varies by bank and the complexity of the estate. We recommend seeking information from the relevant bank about the specific costs they charge in the event of death.

In summary

The loss of a loved one is a distressing experience that places a heavy burden on relatives, both emotionally and administratively. Adopting a structured approach and getting in touch with banks and authorities early on can help with many of the challenges, however. Relatives can save time and money by familiarizing themselves with the necessary steps, documents and support options so they can concentrate on what really matters: saying goodbye and remembering their loved one.