Asset protection is regarded as an accepted legal principle in Switzerland. The Swiss Insurance Law is the legislation providing the most important legal grounds for the protection of assets. All assets invested in annuities and life insurance policies in Switzerland will be protected from creditor if they have been previously recognized by the Federal Office for Private Insurance. Also, in order to benefit from asset protection in Switzerland, there are few requirements to be met.
What are the requirements for asset protection in Switzerland?
In order to benefit from asset protection, both Swiss residents and foreign citizens buying an annuity from an insurance company in the country must designate his or her spouse or children as beneficiaries. According to the Insurance Law, beneficiaries of insurance policies are protected against collection or Swiss bankruptcy procedures. The protection of insurance policy is extended in case of foreign judgment or court orders in case of debt collection procedures in Switzerland. The protection of assets is guaranteed no matter of the designation may be revocable or irrevocable.
Asset protection through trusts in Switzerland
Swiss wealth management services have always been among the most sought services by foreign investors, but the country lacked a legal framework for trusts as asset protection vehicles. However, in 2007 Switzerland joined the Hague Convention on the Law Applicable to Trusts and on Their Recognition. Based on The Hague Convention, Switzerland modified its Trust Law by enabling the appointment of trustees. The Convention also created the legal basis for Swiss trusts in estate planning. The new legislation allows foreign investors to set up a trust and appoint a Swiss trustee. The trust agreement will not only allow trust administration in asset-protected jurisdictions, but will also allow investors to choose dispute clauses in case of litigations. The new legislation on trusts in Switzerland allows the establishment of trusts governed by a law elected by the settlor, according to Article 6 in the Hague Convention.
For detailed information about the provisions of the Insurance Law on asset protection and about asset protection vehicles please contact: swissbankinginfo@bluewin.ch
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