How to collect your money if you have inherited a Swiss bank account

Islamic BankingIf a holder of a Swiss bank account has passed away and the Swiss bank has been informed on the death of the account holder as a client you can be sure that your Swiss bank will freeze the account – immediately. The bank account will be frozen despite if there is a joint account relationship or not.
Do not think that you can have access to the funds just because you are the surviving joint account holder, because you have a post mortem power of attorney or because you are the universal heir. The bank will block the account  in any case.

Swiss bank account inheritance and Islamic banking

For Islamic banking clients it is crucial how to structure inheritance and succession planning if female family members must be protected. Many Swiss bankers which are not familiar with the rules of Islamic banking are proposing a post mortem power of attorney or a joint account as a cheap instrument for inheritance planning. As the head of a family with female members only, you should protect your female family members in a different way. You can set-up segregated accounts in the name of your daughters or you can set-up a very simple trust (similar to a waqf) and appoint your wife and your daughters as beneficiaries of the trust. Any other solution with joint accounts or post mortem power of attorney can be very dangerous for your female family members and they can end in misery and poverty just because of poor advice and wrong inheritance planning for big families.

Why the bank does not allow you to transfer the funds in favour of your own account?

The bank will stay always on the safe side and will avoid the risk to pay out to the wrong person. The bank has to ascertain the identities of al heirs and al successors before one cent will go out of the account. The bank has first to make sure to deal with the legitimate successors and heirs.
All heirs together are considered as successors of the account holder. One heir alone is not authorized to move one cent. Many clients are convinced that the bank will share the account balance between the heirs in equal parts and pay out a share to each single heir. That’s not true. The bank will not pay out until there is a common instruction duly signed by al heirs. The bank is not acting in the benefit of the heirs.
Is the Swiss government controlling the bank if the distribution to the heirs is fair?
The bank is not under the control of the Swiss government. That means that the heirs must be in agreement. The bank will identify each single heir before accepting his signature on the common payment instruction. In case of a pending litigation between the heirs the bank will wait and make money on the funds – until the heirs have an agreement in place. Some clients are expecting the bank to share the balance and making distributions to the heirs according to their share inherited. It’s not true. The bank will do nothing in case of litigation among the heirs.

Example 1: The Joint-Account

We have a joint account in the name of A and B. In case B has passed away the bank will freeze the account in order to avoid making a full pay-out to A. If the bank will effect a pay-out of the entire balance to the surviving account holder A there is the risk that the legitimate heirs of B are demanding their share in their capacity as heirs and legal successors of the account holder B. The bank wants to avoid