Yes, I think that’s the way it might work in real life. But even in this situation, wouldn‘t the swiss bank cashing in the withdrawal from ibkr do its due diligence an report it to the IRS and maybe even freeze the account?
Ah, yes, the infamous strategy of timing death.
Also, death certificates have a time of death displayed and grieving or preparing for grief partners love having fiscal issues as their first to do while the body or “body” is still warm.
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„In practice, if a Swiss tax resident (NRA) has a worldwide estate below USD 15 million, the proportional exemption will generally eliminate any US estate tax liability. However, a US estate tax return (Form 706-NA) will still need to be filed if US-situs assets exceed USD 60,000, even if no tax is ultimately due. „
Irs guidelines:
Irs form:
It is not the end of the world, but still a pain in the ass for the spouse. And as you have to list the actual assets /values, you cannot prepare it all in advance.
PS: as a side note /personnal experience. Back in my wild days in crypto I had a few Ks in Celsius Network, which went bankrupt. I never worried and it was ok, the amount was small and part of the casino allocation, but also not a few bucks, so i did the entire process to recover part of my fund- and when you get a legal document with 50 sides, you just ask yourself wtf you just read - summary: i learned a lot from it, but i would have gone crazy if the amount of money at stake was real.
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Does anybody here now if the form must be filed if the VT shares are held in a joint account and only one of the spouses dies?
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I can’t tell you that, unfortunately. Joint Swiss bank accounts get blocked when a bank learns of the death. This comes often unexpected for the surviving partner, as (s)he has still power of attorney. Deaths get publication in the local official gazette. Unblocking after the Court releases the certificate of inheritance (Erbschein).
Edit: The following links probably do not directly answer your question, but are pertinent.
IBKR needs physically signed and transmitted forms, of course…
2. Have a joint spousal brokerage account. Many think that in terms of inheritance, the surviving spouse can just say, «I’m safe, now everything in the account is just mine.» But in reality, that’s not the case. For non-U.S. citizens, the contents of such an account still fully count toward the inherited estate.
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From your article : “5. Move your entire family before death to a country that has a double taxation treaty with the U.S. for inheritance. There aren’t many such countries (note that we’re talking about a fairly rare Estate & Gift Tax Treaty, not a standard income tax treaty). The Swiss, for example, are happy that they can use multi-million-dollar deductions from the US Estate Tax and not worry about it for estates under $10 million. By the way, you could also get U.S. citizenship – that’s an option too! =)”
OK, let’s assume we want to switch from VT to another ETF but a european one. Which one to choose ??
I am hesitating between WEBN and ALLW.
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So, following options:
- Get rid of all US-domiciled products/securities.
- Stay with 100% US-domiciled products, they are in all aspects superior anyway, lol.
- Stay below USD 60’000 (in an let’s say CHF 4mm portfolio, the US-domiciled etf is probably useless anyway; no real effect in reducing overall TER).
- A lot of Americans are not paying their taxes - why should you (disclaimer: not recommended, obviously, hinthint). No seriously, why did I never have heard about a Swiss guy/family paying US tax or - starting with that - filing the needed forms? Even the Uber driver today had Apple stocks.
- Keep a limited amount in US-domiciled products (e.g. 30%. So, the inheritance is the remaining 70% while the heirs are waiting for the remaining 40% to be released in couple of months/years).
Personally, I wait for the UCITS version of VT to be released and will continue with 40% SCHD and 60% UCITS-VT, forever and ever (yes, I changed my strategy multily times, but THIS TIME everything is different, trust me) - unless the tax treaty goes south, Australian-ETFs will be the new way to go, or if AI decides to shut down the whole stock market.
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Go longterm with VT-UCITS. Temporarily, I personally would choose WEBN, out of these two.
You mean : VWRL?
“Quickly I need my phone” were his last words…
Both articles conclude that IRS forms will need to be submitted to IBKR to release the positions, this I imagine is a mental hassle for many people, regardless of not paying a tax in the 1-1.5 years after the IRS allows IBKR to release the positions. This means they’ll be unable to access the positions/funds for a long time and deal with the stress of waiting for the IRS to do it.
Personally I always found both MP and Poor Swiss to take a position of what sounds like the cheapest or most beneficial (=the cheapest) for them, and take some artistic license in interpreting what’s out there (not in this case).
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Vanguard will launch soon a FTSE Global All Cap ETF, which benchmark-wise is an equivalent of VT.
Although the costs are the best predictor of returns, I would choose VWCE over WEBG. Now we also have an All Cap fund SPYI managed by State Street. There is lots of sampling and as a consequence a high tracking error. But it is worth considering. I would also prefer SPYI over WEBG.
Thank you. Do you have any source I could follow about this ?
Now I just had a moment of smartness and solved the problem here:
We are all investing nerds here. Some, maybe most of us, would be able to deal with this kind of crap. But our spouse we do not know.
So lets just talk about it with her/him, I am pretty sure we will know what to do then.
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@ardius Not that you get an automatic notification. I think internet will be full of it. There is also a thread about the launch on this board New Vanguard European ETFs (2026) - #59 by Akia
And you can always check by Vanguard Products | Vanguard Netherlands Professional
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Yeah, swiss brokers seem to tell you about your obligations and release the funds. I think in practice this means it just goes under the radar (for a regular investor the US won’t even know about it, and enforcement is likely not a priority).
For brokers with US ties (IBKR/Schwab/etc), they’ll do more self enforcement. (And most retail swiss investors have historically been with swiss brokers)
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Thanks for putting the numbers straight. I actually calculated with around CHF 350/hour for a lawyer. (Wrongly?) assuming that it would be an easy task (filling out the IRS form mentioned by @Peppa does not seem to be such a work intensive task) a lawyer would maybe spend 5-7 hours on such a case of an average Swiss VT-and chill inheritance. As for the definition of average, I would take the situation of MP and the poor Swiss as average.
Seems a bit ridiculous how people are fighting each other tooth and nail about this topic here. The advantages and disadvantages are clear. You can feel comfortable with this one way or another, also depending on your individual situation, and both is perfectly fine.
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Hmmm… expecting the lawyer - not just to carefully check and validate the needed docs and your declaration - to fill the form out for you and assume criminal responsability vis à vis the IRS will certainly not make it cheaper. I suspect he will for this at least also want to check conformity with your Swiss declaration, lead an extensive interview with you and get ancillary issues documented.
On top of this come the fees for the valuation of your car, house, etc incl. that the person doing it is duly competent and independent. All docs then have to be notarized (fees) and then a second-order notarization achieved (Ueberbeglaubigung, fee). The lawyer will want to get those probably himself (when personally responsible) and then check them.
Minimum lawyer time billed for any action can be 15min (even if effectively just 5min).
Edit: Oh, and the same game with the translations of all docs.
Edit2: The real fun starts when the IRS want a specific doc (like a birth certificate of a hospital) that Switzerland does not know. You may then just get back a “no this is not it, we need the birth certificate of the hospital before starting the examination”.
Edit3: I just remembered the fun I had when I needed to apply for a US tax number (for a social security number). It got returned since they could not find neither my tax nor my social security number. When I replied to their letter, they told me I needed to apply for a US tax number.
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Again, would be great to have some actual testimonials. I have found this article from 2021 that quotes a lawyer (Jürg Greter from Greter & Partner) that they handle around 10 such cases per year.
Based on the articles of MP and the Poor Swiss I assume these two are planning to submit the IRS forms and have the assets be available within a reasonable time frame and not pay for a lawyer. If they saw a high probability of spending CHF 10k for a lawyer, they would probably include it in the total calculation of their choice for VT+IB.
Yes, in the end it is your choice, your responsability and yours to carry any and all consequences, if any. You should certainly engage this on the basis of who and what you trust.
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