How to manage the debts of a deceased person: rights, duties and options

What happens to the inheritance when there are debts?

In Switzerland, inheriting does not only mean receiving assets. You also inherit debts. This is what is called the passive estate.

The principle is simple: when a person dies, their estate passes to the heirs in its entirety. This includes assets (property, bank accounts, vehicles, valuables) and liabilities (all debts).

The most common debts after death are:

• Bank loans and mortgages
• Consumer credit
• Unpaid bills (electricity, telephone, health)
• Rent arrears
• Tax debts

These financial obligations do not disappear with death. They are an integral part of the estate with debts that heirs must manage.

Your rights as an heir facing debts

Good news: no one can force you to accept a negative inheritance. Swiss law protects you and offers you three distinct legal options.

You have a reflection period of 3 months from the moment you learn of the death. This deadline is imperative and must be strictly respected.

During this period, you can:

• Accept the estate without reservation
• Accept subject to an inventory
• Refuse outright

Each option has different legal and financial consequences. It is essential to understand your rights properly before making a decision.

Option 1: Accept the estate outright

Acceptance without reservation means that you take everything: the assets AND the debts, without limitation.

This option is relevant when the estate is clearly positive, meaning that the value of the assets far exceeds the amount of debts.

Beware of the major risk: you become personally and unlimitedly liable for all the debts of the deceased. If the assets are not sufficient to cover them, you will have to pay out of your own pocket.

Your personal assets can be engaged to repay creditors. This is why this option should only be chosen with full knowledge of the facts, after a complete inventory.

Option 2: Accept subject to an inventory

This option is intelligent protection: you accept the inheritance, but your liability as heir is limited to the value of the assets received.

Concretely, you only pay debts up to the value of what you have inherited. Your personal assets remain protected.

To benefit from this protection, you must make a formal declaration to the competent authority of your canton within one month following the death.

This option is ideal when the financial situation of the deceased is unclear or uncertain. It allows you to inherit whilst protecting yourself from potential liabilities exceeding the assets.

To understand all the steps and deadlines, consult our guide on the deadlines and steps for settling an estate in Switzerland.

Option 3: Refuse the estate outright

You can refuse the inheritance in its entirety. This is outright renunciation.

In this case, you receive nothing, but you pay no debts. Legally, you are considered never to have been an heir.

The procedure is formal: you must declare your renunciation in writing to the competent cantonal authority within 3 months following the death.

This option is necessary when the inheritance is clearly negative, meaning that the debts far exceed the value of the assets.

If you do not know the succession situation, it may be useful to consult our article on the death of a loved one without a will to understand your rights.

How to know if the estate is positive or negative?

Before choosing, you must establish a complete and precise estate inventory.

On the assets side, list:

• Property (estimated value)
• Bank accounts and investments
• Vehicles
• Valuables, jewellery, collections
• Life insurance

On the liabilities side, record:

• Outstanding loans and credit
• Unpaid bills
• Tax debts
• Rent owed

To obtain this information, contact banks, known creditors, consult the land register and check the deceased's mail.

Do not forget digital accounts and online subscriptions which can generate fees. Our guide on managing the digital accounts of a deceased person will help you.

A notary or the supervisory authority can assist you with this inventory.

Pitfalls to avoid

Certain acts constitute tacit acceptance of the estate, even if you have not formally signed anything.

Be careful not to:

• Use the deceased's assets (drive their car, live in their home)
• Pay the deceased's bills with their money
• Sell estate assets
• Cash cheques in the deceased's name

Silence or inaction after the 3-month deadline constitutes outright acceptance. You then become liable for all debts.

Do not give in to pressure from creditors who contact you. You have the right to take time to reflect.

Before any decision, consult a notary, a specialised lawyer or the estate supervisory authority of your canton.

Who pays the debts if all heirs refuse?

If all heirs renounce the estate, it becomes "vacant".

In this case, the State takes charge of the liquidation. The assets are sold and the proceeds of the sale are used to pay creditors in the legal order of priority.

Creditors absolutely cannot turn against heirs who have formally refused the estate within the deadlines.

If the assets are not sufficient to cover all debts, they remain unpaid. Creditors must accept the loss.

This is a rare situation, but it protects heirs from an insurmountable financial burden.

Practical advice for managing an estate with debts

When facing an estate with debts, here are the best practices to follow:

• Respect the deadlines: 1 month for acceptance subject to an inventory, 3 months for renunciation
• Establish a complete inventory: list all assets and all debts without exception
• Consult a professional: notary or lawyer specialised in inheritance law
• Do not sign anything under pressure: take time to understand each document
• Inform all co-heirs: the decision must be coordinated
• Keep written records: keep all letters, declarations and exchanges

For general administrative procedures, our guide on administrative formalities after a death will be useful.

Wolky can help you communicate the death to those around you by publishing an obituary online quickly and with dignity.

Managing the debts of a deceased person is not inevitable. As an heir, you have three clear options: accept outright, accept subject to an inventory, or refuse the estate. Each choice has its legal and financial consequences.

The essential thing is to act methodically: do not touch anything before you have made a complete inventory, respect the legal deadlines, and do not hesitate to consult a notary or a lawyer specialised in inheritance law. A wrong choice can make you personally liable for significant debts.

Remember that you are never obliged to accept a deficit inheritance. Swiss law protects heirs against involuntary indebtedness, provided the procedures are followed.

To support your loved ones during this difficult period and honour the memory of the deceased with dignity, publish an obituary on Wolky in just a few minutes, at a transparent rate of 180 CHF.