Divorce in Switzerland: what impact on your wealth?

Divorce and wealth planning: a pivotal financial transition

Divorce is a major life event, both emotionally and financially. The dissolution of a marriage has far‑reaching consequences for the division of assets, pension provision, real estate, taxation and the future management of your wealth.

Anticipating these impacts is essential to navigate this transition more serenely and to protect your long‑term financial interests.

The matrimonial property regime: a determining factor

In Switzerland, the financial consequences of a divorce largely depend on the matrimonial property regime:

Participation in acquired property (statutory regime): personal assets remain separate, while assets accumulated during the marriage are divided equally.
Separation of property: each spouse retains ownership of their assets and income. No automatic sharing applies, except for assets held jointly.
Community of property: all assets and income are pooled and divided according to the rules of the regime upon divorce.

The chosen regime has a direct impact on how wealth is redistributed and must be analysed carefully.

Real estate and family home

Real estate is often one of the most sensitive issues in a divorce:

sale of the property and division of proceeds,
takeover of the property by one spouse with compensation to the other,
temporary continuation of joint ownership in specific situations.

Each option has financial, tax and long‑term planning implications that must be carefully assessed.

Divorce and mortgage financing: a key area of concern

In Switzerland, many property owners maintain long‑term mortgages with limited amortisation. This common practice can make mortgage restructuring particularly complex in the event of divorce, especially when one spouse is approaching retirement age.

In such cases, taking over the mortgage alone is not always possible, as future income may be lower and no longer meet the bank’s affordability criteria. This situation can lead to prolonged uncertainty and heightened tension between former spouses.

Seeking advice from an independent expert makes it possible to review restructuring options, anticipate age‑ and income‑related constraints, and identify suitable solutions. By planning ahead, you can establish a new, independent financial plan, reduce conflict and avoid extended financial uncertainty.

Revisiting your retirement planning after a divorce

Divorce has a direct and lasting impact on your retirement strategy, particularly regarding the division of occupational pension assets. Reviewing your situation is essential to anticipate long‑term consequences and adapt your financial planning accordingly.

Depending on your life plans, strategic decisions may be made, such as planning an expatriation, identifying pension buy‑in opportunities or optimising your tax position. Following an LPP pension split, it is often possible to rebuild the transferred amount through voluntary buy‑ins, which are generally tax‑deductible, subject to specific conditions.

Pension provision: how are the three pillars affected by divorce?

Pension provision is often one of the areas most affected by divorce.

It is important to note that matrimonial property regimes have no impact on the division of pension rights, regardless of whether the spouses opted for participation in acquired property, separation of property or community of property.

A comprehensive review allows you to assess future income and expenses, manage your capital effectively, optimise taxation, implement saving strategies and limit the impact of divorce on your retirement finances.

First pillar (OASI / AVS)

As a rule, divorce has a limited impact on the first pillar.

The OASI income‑splitting mechanism divides the spouses’ income earned during the marriage equally, excluding the first and last year of marriage.

This system is designed to protect the spouse who reduced or stopped their professional activity to care for children, manage the household or pursue unpaid activities.

For higher‑income couples, divorce may even be financially neutral or advantageous, as former spouses are no longer subject to the cap limiting married couples’ combined OASI pensions to 150% of the maximum individual pension.

Second pillar (LPP)

The second pillar represents personal retirement savings, funded by both employee and employer contributions.

Upon divorce, pension assets accumulated by both spouses from the start of the marriage until the initiation of divorce proceedings are generally divided equally, irrespective of the matrimonial property regime.

Since the 2017 reform, certain exceptions apply, particularly where one spouse is already receiving disability or retirement benefits.

It is also important to recognise that not all pension funds are equal. Even with similar salaries, accumulated savings may vary significantly depending on:

the pension plan selected by the employer,
the interest credited to pension assets,
risk coverage benefits,
the conversion rate applied at retirement.

Assess your situation and plan your future projects.

Take the time to address all the essential questions that need answering, such as the consequences of your matrimonial property regime, the timing of the separation, legal fees, taxation, savings, future income, retirement, housing, children's needs, and estate planning. Each question helps you better understand the different aspects of your new life.

Third pillar

The third pillar is private pension provision, funded exclusively by individual contributions, without employer participation.

In the event of divorce, the treatment of third‑pillar assets often follows principles similar to those of the second pillar, depending on the nature of the assets and their link to the marriage period.

Divorce has long‑lasting consequences for your wealth and financial structure. A structured and forward‑looking approach helps protect your interests, restore financial stability and move confidently into the next stage of your life.

Divorce and taxation

Separation also affects your tax situation:

separate taxation applies from the year of de facto separation,
potential tax implications may arise from the division of assets (real estate, investments, liquid assets),
individual tax planning must be reviewed and adapted.

A thorough tax analysis is essential to avoid unforeseen consequences and to optimise the new wealth structure following a divorce.

Rebuilding your wealth after a divorce

Beyond asset division, divorce marks the beginning of a new phase in your wealth planning journey.

This phase often involves:

redefining your financial objectives,
restructuring your investments,
securing your pension provision,
adapting your financing and investment strategy.

Taking the time to address these aspects helps you lay solid foundations for the next stage of your life.

Why seek professional guidance in this context?

Divorce has long‑lasting effects on your wealth and financial organisation. A structured and forward‑looking approach makes it possible to protect your interests, maintain financial stability and move forward with greater confidence.

At Piguet Galland, we help you to:

understand your rights and obligations,
anticipate the long‑term impact of the decisions you take,
limit financial and tax risks,
make informed decisions in an emotionally sensitive context.

Contact a Piguet Galland expert