Interview with Désirée von Michaelis, Head of Wealth Planning at Credit Suisse, about inheritance and retirement provision

"Women tend to take care of inheritance issues while men are more likely to be in charge of retirement provision."

Désirée von Michaelis deals with questions about inheritance and retirement provision on a daily basis – topics that are closing in under the influence of COVID-19, although many people would prefer to avoid them. In an interview, she explains why it is advantageous to look into these issues as early as possible.

Your job involves dealing with matters relating to retirement provision and inheritance issues. When do people start thinking about old age and their own mortality?

There are so-called magic moments – significant events in our lives like getting married, the birth of your children, buying a property. Sometimes they are not magic at all, for instance a divorce or the death of a person the same age. However, they are always moments of change in which you start to think about how to shape the future and protect your family.

In your opinion, when is the best time to start tackling retirement provision?

We recommend dealing with retirement provision at the latest when you hit 50 by asking yourself what is important to you – and whether there is enough money to cover those needs. However, I must immediately put this piece of advice into perspective: You should start paying into tied pension provision as soon as you are in regular employment. If you only start regularly paying into a Pillar 3a account from the age of 50, you will not only miss out on having set aside a valuable financial buffer but will also forgo the option to save taxes every year. Every year that goes by without having made the most of these benefits is a year lost. Our current pension fund study shows that, in addition to the third pillar, private, untied savings are gaining significance within the context of guaranteeing that you have peace of mind in the third stage of your life – we must all expect a drop in pension payments.

And when would be the best time to think about protecting those dear to me?

The moment when inheritance issues become relevant is very different for each one of us. A typical occasion would be when you purchase a home of your own. For instance, clearly define who is responsible for underage children in the event that one parent dies. We recommend our clients check every five to ten years whether their plans to dispose of their estate continue to meet their personal situation. However, we advise that you immediately review things in the event of significant changes to your life situation.

Désirée von Michaelis, Head of Wealth Planning at Credit Suisse, expert for inheritance and retirement provision

Désirée von Michaelis (45) is the Head of Wealth Planning at Credit Suisse. She has been working in the financial sector for 18 years. She tackled her own inheritance situation for the first time a few years ago when she bought a property with her husband.

Is planning your inheritance something only the well-off tend to do? Or are there good reasons for me to look into doing exactly that, even if I lead a fairly modest life?

You don't have to own that much, it's more about the complexity and how property is divided up that is important. It's easy to fall out with someone over the value of a small property or company. It makes sense to clarify the situation as soon as there are several heirs. We are also seeing more and more people intending to include someone outside the statutory line of succession, for instance cohabiting partners. Many people also want to leave a legacy and donate their inheritance or parts of it to a charitable organization.

Passing on an inheritance is expected to become more flexible soon, when the Federal Council revises inheritance legislation…

Yes, upcoming changes to laws will focus on exactly how to adapt inheritance legislation to life's new realities. Common family setups, such as patchwork families or cohabitation, are not adequately taken into account in current inheritance legislation. Testators are expected to be granted more scope to pass on property to a person or organization close to their heart.

Let's assume someone decides to protect themselves and their loved ones by defining inheritance parameters. What's the best approach?

First of all, we recommend defining who will be responsible in the event that you yourself are no longer able to make decisions or have died. Do so with an advance directive and a living will. The advance directive lets me determine who would be responsible in the event that I am no longer able to make decisions about my care and accommodation and who would represent me in all other contexts, for instance wealth management. The living will specifies the medical procedures to which I consent, and which treatment I would prefer not to have. Michael Schumacher's tragic accident shows that these things should not be put off until the later stages of life. Anyone can be affected. If you have underage children, power of attorney for child custody is also a good idea. It specifies who takes the parents' place should they no longer be able to take care of their children.

How do I proceed in terms of specifying the inheritance once I have created a living will and an advance directive?

Your personal situation may change at any point. For this reason, you should ask yourself every few years: What do I own? Who would I like to involve? Who needs protecting? And what is important to me? If you decide that statutory regulations fail to adequately cover your needs, write a last will. Our website provides plenty of advice including instructions on how to write a last will.

However, the issue remains very complex. It can initially seem overwhelming.

Sometimes we are faced with genuinely complicated situations. Especially when it's about advancements and donations or dividing up real estate. Credit Suisse can rely on a team of 30 inheritance experts at eight different locations throughout Switzerland to support clients in planning and implementation. The best way to tackle the issue is to contact your client advisor. 

You frequently hear people saying women are less interested in pension provision and inheritance issues than men. Does your experience confirm this?

Only partly. Whenever it's about inheritance, women tend to be the ones who feel responsible, approaching the issue by creating an advance directive and living will. Men tend to struggle more with these emotional contexts. In contrast, they are more likely to take charge of retirement provision. Married women in particular like to leave these issues to their husbands. In many cases, they do not fully realize the consequences a break to raise a family or part-time employment have on retirement provision. We recently established in a study that many women fail to make the most of the potential Pillar 3 offers, even if they have the financial leeway to do so.

How can we change this?

By repeatedly talking about these issues. It's good that the revision of AHV and BVG is currently a much discussed topic. Women and banking is something that is generally still uncommon. I would like to ask fellow women to look into finances and retirement provision. These issues may initially seem a little dry, but once you realize what an influence they have on the future quality of life, it suddenly gets interesting. 

Last, but not least: do you have any advice on how we can encourage ourselves to actually deal with these more than challenging tasks?

I can only share what works for me: I put things I tend to put off on the agenda and I simultaneously tell those around me what I plan to do. This increases the pressure I put on myself and also brings about the advantage that those people I hold dear may also feel inclined to deal with these issues straight away. It feels good once you're done: You feel relieved and, quite rightly so, also proud – full of that famous peace of mind.

Do you have any questions about inheritance and protecting yourself and your loved ones or your retirement provision?

Schedule a consultation This link target opens in a new window
We are happy to help. Call us at 0844 200 114 or arrange an appointment to see us.