What the February 2026 Ruling Said
On February 5, 2026, the Swiss Federal Supreme Court issued judgment 2C_437/2024, clarifying that placing Swiss real estate into a trust counts as an acquisition by a person abroad under Lex Koller—the Federal Act on the Acquisition of Real Estate by Persons Abroad. Even when the trustees and beneficiaries are all family members, the transfer requires government authorization. The court rejected the argument that a family trust should be treated the same as a direct family transfer.
Lex Koller is Switzerland's decades-old framework for controlling foreign ownership of Swiss property, designed to prevent speculative purchases and preserve housing for residents. The law requires non-residents and foreign entities to obtain cantonal authorization before buying most types of Swiss real estate, with exceptions carved out for primary residences and direct family transfers.
The 2026 ruling matters because Switzerland formally recognizes trusts under the Hague Convention on the Law Applicable to Trusts, which it ratified in 2007. Many advisors and families had assumed that recognition meant trust transfers would be treated similarly to direct family transfers. The Supreme Court closed that gap: recognition for conflict-of-laws purposes does not equal exemption from Lex Koller authorization requirements.
Why Americans in Switzerland Use Trusts
American families in Switzerland often establish trusts for estate planning—both to comply with US estate and gift tax rules and to navigate Swiss forced heirship laws. A revocable living trust is common in US estate planning to avoid probate, maintain privacy and provide continuity if the grantor becomes incapacitated. For Americans abroad, trusts can also help coordinate US and foreign legal systems that don't naturally align.
Swiss succession law includes forced heirship rules that reserve a compulsory portion of your estate for direct descendants and, in some cases, a surviving spouse. The 2023 Swiss succession reform reduced the compulsory portion for children from three-quarters to one-half of the estate, giving you more testamentary freedom than before—but still less than you would have under the law of most US states.
What Forced Heirship Means
Forced heirship (also called reserved portion or compulsory share) means Swiss law guarantees certain heirs a minimum share of your estate, regardless of what your will says. Since 2023, children collectively are entitled to one-half of what they would inherit under intestacy rules. You can freely dispose of the other half. A trust structure used to be one way to attempt greater flexibility, but Swiss courts have increasingly applied forced heirship rules to trust assets as well.
Trusts also appear in cross-border estate planning to hold US assets for non-US beneficiaries, or to ring-fence assets subject to different tax or legal regimes. The flexibility that makes trusts attractive in a US context does not translate seamlessly to Switzerland, where the legal system is civil law and treats trusts as foreign constructs recognized for limited purposes.
What Lex Koller Authorization Requires
Lex Koller authorization is handled at the cantonal level. Each canton has its own process, but the framework is set by federal law. Authorization is generally granted for a primary residence—if you live in Switzerland and the property will be your main home, approval is usually straightforward. Authorization becomes more restrictive for secondary residences, investment properties and properties held by entities rather than individuals.
The February 2026 ruling means that if you transfer Swiss real estate you already own into a trust, that transfer is treated as a new acquisition by the trust, triggering the authorization requirement. If you never obtained authorization at the time of transfer, you are out of compliance. The consequences can include nullification of the transfer and administrative penalties.
Direct transfers to a spouse or to children in the direct line of descent do not require authorization under Lex Koller. This exemption remains intact. The ruling draws a bright line: transfer to a natural person in your immediate family is exempt; transfer to a trust—even a family trust for the benefit of those same people—is not.
Does This Apply to Trusts Established Before 2026?
Yes. The ruling clarifies existing law; it does not create a new requirement with a grace period. If you transferred Swiss property into a trust in 2022, 2018 or any earlier year without obtaining Lex Koller authorization, the transfer was—under this interpretation—unauthorized from the start. The practical question is whether cantonal authorities will pursue retroactive enforcement, seek regularization or allow transfers to remain undisturbed if no one raises the issue.
Enforcement varies by canton and typically becomes relevant when you sell the property, attempt to re-register title or when an interested party (such as a disinherited heir) challenges the structure. If you hold Swiss real estate in a trust, the prudent path is to review the structure with a Swiss attorney who specializes in Lex Koller compliance and determine whether you need to seek authorization now or unwind the trust arrangement.
How This Interacts With US Estate and Gift Tax
The US taxes its citizens on their worldwide estates, regardless of where they live. Switzerland and the United States have an estate tax treaty, signed in 1951, that prevents double taxation of estates and provides rules for determining which country has primary taxing rights over specific assets. Under the treaty, real property is taxed in the country where it is located—so Swiss real estate is taxed in Switzerland first, and the US allows a foreign tax credit for Swiss inheritance tax paid.
Swiss cantons levy inheritance and gift taxes; there is no federal estate tax in Switzerland. Rates and exemptions vary significantly by canton and by the relationship between the deceased and the heir. Spouses and direct descendants are exempt from inheritance tax in most cantons, which can make Switzerland a more favorable estate tax environment than the US for transfers to children—if you are subject to US estate tax above the exemption threshold.
Estate Tax Treaty and Situs Rules
The US-Switzerland estate tax treaty follows old situs rules, meaning real property is taxed where it sits and financial assets are taxed based on where they are held or managed. The treaty does not follow the newer domicile-based approach used in some more recent US estate tax treaties. For Americans in Switzerland with significant assets, understanding situs and treaty allocation is essential—this is not a do-it-yourself exercise.
Transferring property into a US revocable living trust is generally not a taxable gift for US purposes, because you retain control and the transfer is incomplete for gift tax. But Swiss law may view the same transaction differently, especially if the trust is irrevocable or if beneficial ownership has shifted. Now, with the Lex Koller requirement added to the mix, a transfer that was already complex from a tax perspective also requires regulatory approval.
If you establish an irrevocable trust and transfer Swiss real estate into it, you may trigger US gift tax (if the value exceeds the annual exclusion and lifetime exemption), Swiss cantonal gift tax and now a Lex Koller authorization requirement. The three systems do not coordinate. You need advice that accounts for all three before you act—not after the fact.
The December 2024 Ruling on Trust Assets and Estates
In December 2024, the Swiss Federal Court issued another significant ruling (5A_89/2024) that clarified trust assets can be treated as separate from the Swiss estate for purposes of estate distribution and forced heirship claims. That ruling recognized that assets validly transferred to a trust and no longer controlled by the settlor do not form part of the estate subject to Swiss succession law.
The two rulings are not contradictory. The December ruling addressed what happens once a trust is validly established and funded: those assets stand outside the estate. The February 2026 ruling addresses the threshold question: was the transfer into the trust valid under Swiss law in the first place? If the transfer required Lex Koller authorization and you did not obtain it, the transfer may be void or voidable, meaning the property never left your personal ownership and would remain part of your Swiss estate.
The interplay between these cases shows Swiss courts are developing a framework for trusts that respects the distinction between trust property and personal estates—but only when the trust was established in compliance with all applicable Swiss rules. Lex Koller compliance is now clearly part of that checklist.
50%
Compulsory share for children under Swiss law since 2023 succession reform (reduced from 75%)
Practical Steps If You Hold or Are Considering a Trust
If you already hold Swiss real estate in a trust, the first step is to determine whether Lex Koller authorization was obtained at the time of transfer. Review the transfer documents and any cantonal correspondence. If no authorization was requested, consult a Swiss lawyer experienced in Lex Koller to assess your exposure and options. In some cases, retroactive authorization may be available; in others, unwinding the trust or restructuring ownership may be the best path.
If you are considering a trust structure for estate planning and you own or plan to own Swiss real estate, the calculus has changed. The February 2026 ruling does not prohibit using trusts—it requires that you obtain authorization for the property transfer. That adds time, cost and uncertainty to a structure you may have thought was straightforward. In many cases, direct ownership or direct transfer to heirs may now be simpler and equally effective.
- Confirm whether existing trust transfers received Lex Koller authorization—if not, seek legal advice on regularization or restructuring.
- For future planning, model the scenario with and without a trust: consider US estate tax, Swiss forced heirship, cantonal inheritance tax and Lex Koller approval timelines.
- Do not assume that because Switzerland recognizes trusts under the Hague Convention, your trust structure is automatically compliant with all Swiss property and tax laws.
- Work with advisors in both jurisdictions—US and Swiss—who understand the interaction, not specialists in only one system.
Estate planning for Americans in Switzerland requires coordinating US citizenship-based worldwide taxation with Swiss civil law succession rules, cantonal inheritance taxes and now explicit property authorization for trust transfers. Every family's situation is different: the value of your assets, your intended heirs, your canton of residence and your US state of origin all influence the optimal structure. This is exactly the kind of planning that depends on your situation—generic strategies are not sufficient.
What This Means Going Forward
The February 2026 ruling does not close the door on trusts for Americans in Switzerland, but it removes one of the perceived advantages: the idea that a trust transfer was a private family matter outside the scope of foreign ownership restrictions. Trusts remain a legitimate and useful tool for cross-border estate planning—but only when structured in full compliance with both US and Swiss law from the outset.
For many families, the added complexity and cost of obtaining Lex Koller authorization may tilt the balance toward simpler ownership structures. For others—particularly those with significant US estate tax exposure or complex family situations—a trust may still be the right answer, now with the understanding that authorization is required.
Do Not DIY Cross-Border Estate Planning
The stakes are high: an invalid transfer can trigger forced heirship claims, estate fights among heirs, tax penalties in two countries and the loss of privacy you sought by using a trust in the first place. US estate planning software and online trust documents do not account for Lex Koller, Swiss forced heirship or cantonal gift taxes. Get professional advice in both jurisdictions before you sign anything or transfer title to any property.
At US Expat Wealth, we specialize in the intersection of US citizenship-based taxation and Swiss financial and legal systems. We work with Americans in Switzerland to design estate plans that respect both regimes, coordinate with qualified Swiss legal counsel on Lex Koller and succession matters and help you make informed decisions with clarity rather than confusion. If you own Swiss real estate or are planning your estate across these two systems, this is the moment to get your structure reviewed and your documentation in order.