Contingency planning with proxies in Switzerland

A person capable of acting, i.e. anyone who is at least 18 years of age and has capacity of judgement, may grant a proxy. In Switzerland, proxies are frequently used. With a proxy, you appoint someone to take important actions on your behalf in the event of certain contingencies, such as absence or lack of availability.

Under Swiss law, general and specific proxies can be granted for all legal, administrative, management or personal matters, as long as it does not concern the exercise of strictly personal rights (e.g. right to marry and file for divorce, right to establish or revoke a last will or to enter into an inheritance contract as a testator, right to legally acknowledge a child) and as long as it does not concern certain rights and obligations arising from mandates that are strictly ad personam (e.g. board of directors membership). Swiss banks are often reluctant in accepting general proxies and insist on their own forms being used.

Swiss law does not impose any formal requirements on the establishment of proxies. Thus, regardless of the matter intended to be executed by proxy, the proxy may, in principle, be granted in writing, orally or even implicitly by circumstances. The proxy becomes valid immediately upon being granted by the principal.

However, in commercial dealings, business parties usually specify formal requirements with regard to proxies and the right of representation. Banks, in particular, often only accept proxies that are issued on their standard bank forms or proxies that are granted with regard to the specific banking relationship in question. Similar rules apply with regard to postal services.

According to Swiss law and doctrine, a proxy may expressly provide to remain valid beyond the principal's death (transmortal proxy). Similarly, a proxy, which shall only be effective upon the principal's death or at a point in time after the principal's death (postmortal proxy), is valid. However, the principal's heirs are free to withdraw such proxy at any time. Generally speaking, transmortal and postmortal proxies are not a stable planning instrument under Swiss law, particularly as far as banks are concerned. Binding wealth and estate planning after death is only achieved through testamentary dispositions.

Unless stated otherwise, a proxy is valid as long as the principal is capable of acting and thus capable of revoking the proxy. Even if a proxy is granted also for the event of incapacity, representatives may encounter difficulties when dealing with banks, authorities or medical institutions, so that the Swiss adult protection authority must ultimately be involved. It is, therefore, recommended to set up the statutory instruments specifically designed to cater for the event of incapacity: With a patient decree or living will (Patientenverfügung) the principal appoints a representative and sets forth his or her instructions and wishes as to medical treatment in case he or she cannot personally express or communicate his or her wishes. With an advance care directive or durable proxy (Vorsorgeauftrag) the principal may appoint a person to represent him or her in all matters of personal care and management of assets in the event of long-term incapacity. The advance care directive only comes into force upon validation by the Swiss adult protection authority (which is the Swiss equivalent to guardianship authorities or guardian courts in other countries).

Unlike for the patient decrees and advance care directives, there is no central deposit or register for proxies. Proxies are thus often deposited with the attorney at law.

Due to the very specific legal framework in Switzerland, careful and comprehensive contingency planning requires a combined setup of the various representation instruments provided by the law (proxy, patient's decree, advanced care directive and testamentary dispositions).