The exemption cliff that didn't happen
If you're a US citizen living in Switzerland, the US federal estate tax follows your citizenship, not your residence. That means your worldwide assets are potentially subject to US estate tax at death. The good news: the feared 2026 'cliff' didn't happen. Under the One Big Beautiful Bill (Public Law 119-21, signed July 4, 2025), the basic exclusion amount for decedents dying in 2026 is $15,000,000, up from $13,990,000 in 2025, and it will be indexed for inflation going forward, according to the IRS 'What's new, Estate and gift tax' page (2026) and Congress.gov CRS R48183 (July 2025). The top federal rate remains 40% on the taxable portion, but only about 0.07% of decedents actually owe federal estate tax.
What's actually in your US taxable estate
Because the US taxes worldwide assets at death, your Swiss real estate, bank accounts, brokerage accounts, pension assets, business interests, and even the cash value of certain Swiss life insurance policies can all be part of the estate-tax picture. This is a different logic than most Swiss cantons use. If you're also inheriting from someone in Switzerland, the guide to inheriting from Switzerland, Form 3520, and probate covers the reporting side of that process.
Portability can double your $15 million: but only if you file
If you are married, your surviving spouse may be able to use your unused basic exclusion amount through 'portability.' That can make a married couple's combined exclusion $30 million in 2026. The catch is that portability is not automatic: the executor must file a timely Form 706 (United States Estate and Generation-Skipping Transfer Tax Return) to make the election. Many families miss this because no tax is owed, but the form still may be worth filing to preserve the exemption.
- 2026 basic exclusion amount
- $15,000,000
- Combined married exclusion with portability
- $30,000,000 (if Form 706 filed)
- Top federal estate tax rate
- 40%
- 2026 annual gift exclusion to non-citizen spouse
- $194,000
- Ordinary annual gift exclusion
- $19,000
- Swiss federal inheritance tax
- None (cantonal only)
The non-citizen spouse trap most cross-border couples miss
The unlimited marital deduction lets you leave any amount to your spouse free of US estate tax, but only if your spouse is a US citizen. If your spouse is a Swiss citizen, there is no unlimited marital deduction unless the assets pass through a QDOT (Qualified Domestic Trust). A QDOT is a special trust that defers the US estate tax until money is distributed out of the trust to the non-citizen spouse. Without a QDOT, amounts left directly to a non-citizen spouse above your $15 million exemption are taxed at up to 40% at death. This is the trap that surprises couples who assume 'spouse' means the same thing in both systems.
The rule to check now
If you are married to a Swiss spouse and your worldwide estate is above $15 million, don't assume the spouse exemption applies. The QDOT structure is well-established, but it needs to be set up before it's needed.
Annual gifts to a Swiss spouse have their own limit
While gifts to a US-citizen spouse are unlimited, the annual gift tax exclusion for gifts to a non-citizen spouse is $194,000 for 2026 (indexed; it was $190,000 in 2025). For anyone else, the ordinary annual exclusion is $19,000. These are gift tax rules, not income tax, so you don't report them on a Swiss salary slip. The IRS 2026 Form 709 instructions and the IRS FAQ on gift taxes for nonresidents explain how these amounts work.
Step-up in basis still works in your favor
At death, inherited assets generally receive a 'step-up' in basis to their date-of-death value. That wipes out embedded capital gains, so your heirs can typically sell without paying US capital gains tax on the appreciation that happened before death. This is one reason holding appreciated assets tends to be more tax-efficient than gifting them during life, though every family situation is different.
Switzerland usually taxes inheritance much less
Switzerland has no federal inheritance tax; only the cantons levy inheritance or estate taxes. In essentially every canton, a surviving spouse is exempt from cantonal inheritance tax. Direct descendants or children are also exempt in most cantons. So for a typical American leaving assets to a Swiss spouse or children, Swiss cantonal inheritance tax is usually zero or close to it. Only more distant relatives and non-relatives face meaningful rates, which can reach roughly 50% or more in some cantons, such as Geneva's roughly 54.6% for non-relatives, according to the Swiss Federal Tax Administration (ESTV) documentation and ch.ch.
The 1951 treaty does not cover everything
The US-Switzerland estate and inheritance tax treaty, signed in 1951, provides a credit to reduce double taxation for specific categories of property: shares in companies organized in the other country, certain debts owed by persons or companies in the other country, corporeal movable property physically located in the other country, and other property the two countries agree on. Notably, real estate is not on that credit list, see Fedlex, the 1951 convention (0.672.933.62). That means a Swiss home can be exposed to both US federal estate tax and Swiss cantonal inheritance tax in some situations, so the treaty is not a blanket fix.
When to get personal advice
If your worldwide estate is below $15 million, or you're leaving assets to a US-citizen spouse or children, the US federal estate tax result is often zero and the Swiss side is usually zero too. The situations that genuinely warrant personal planning are a non-citizen spouse above the exemption, significant Swiss real estate, or a family structure that mixes US and Swiss heirs. This is educational information, not individual tax or legal advice, and the right structure depends on your specific facts. If you want to map this out, our estate planning guide for US expats in Switzerland is a good starting point, and a conversation with us can turn it into a concrete plan.