Family Foundations
Swiss Family Foundation Examples: Illustrative Case Studies & Structures
A Swiss family foundation example shows how a founder dedicates assets to a defined family, for education, endowment or support, within the limits of Article 335 of the Swiss Civil Code. Because real family foundations are private and are not catalogued like charitable ones, the worked examples below are illustrative and hypothetical, not real client cases. They are reasoned from published Swiss foundation law so you can see what a lawful structure actually looks like.
This guide sets out three illustrative structures, an education endowment, a one-off establishment support, and a combined family-and-charitable approach, then draws out their common elements and checks each against Article 335.
By Hansruedi Mueller, Swiss foundation lawyer, Foundations in Switzerland. Published 4 June 2026 · Last updated 4 June 2026.
Key takeaways
- The examples here are illustrative, not real families or confidential cases. Genuine family foundations are private, so honest illustration beats invented “case studies”.
- Every lawful example must fit Article 335: education, endowment (Ausstattung) or support (Unterstützung) of family members. General maintenance is not permitted.
- A pure family foundation is exempt from supervision by the Federal Supervisory Authority for Foundations (ESA) and from the statutory audit, but it must be entered in the commercial register to acquire legal personality.
- Add a genuine charitable (public-benefit) element and the structure becomes a mixed/ordinary foundation: it is then supervised, audited and registered like any other.
- Family foundations are generally not tax-exempt. The structure delivers governance and continuity, not tax savings.
- The Family Foundation Reform 2024 would relax the maintenance rule, but it is not yet law; the current Article 335 limits still apply to every example below.
How to read these examples (illustrative)
We avoid naming real families or presenting confidential files. Family foundations are private: unlike charitable foundations, they are not listed in a public supervisory directory, so there is no honest “gallery” of real cases to draw on. This is also wealth and legal territory, where accuracy and discretion matter more than impressive-sounding names.
So each example below is a typical structure a founder might adopt, built from the rules rather than from any one client. For each, we describe the same five elements:
- the purpose clause and which Article 335 limb it relies on;
- the assets endowed;
- the foundation board (Stiftungsrat) that governs it;
- the distribution rules that bound what it may pay; and
- its supervision and tax position.
If you want the underlying definitions first, start with our pillar guide to the Swiss family foundation (Familienstiftung).
Example 1, Education endowment for descendants (illustrative)
The idea. A founder wants to give every descendant in the family a fair start in education and professional life, in a disciplined, rules-based way rather than as ad-hoc gifts.
Purpose. The deed dedicates the assets to the education, training and professional advancement of the founder’s descendants. This sits squarely within the education limb of Article 335, which Swiss courts treat as a permitted purpose.
Assets. The founder irrevocably endows a securities and cash portfolio sufficient to fund grants from investment income over the long term. Swiss law sets no fixed minimum, but the endowment must be adequate to credibly pursue the purpose; in practice a family foundation is typically funded well above the CHF 50,000 level often cited as a working floor.
Foundation board. The Stiftungsrat combines two family members with one independent professional. Appointing at least one member with no family or business tie to the founder is a modern governance standard that supports impartial decisions, and at least one Swiss-resident member is expected in practice. Board duties, care, loyalty and proper asset management, mirror those we set out in our guide to the Swiss foundation board.
Distribution rules. The statutes define eligible costs (school and university fees, vocational training, a defined professional-development allowance) and require an application against published criteria. The board has bounded discretion; it cannot convert the scheme into an open-ended allowance.
Supervision and tax. Because the purpose is purely a family one, this foundation is exempt from ESA supervision and from the statutory audit under Article 87, but it must still be entered in the commercial register to exist as a legal person. It is not tax-exempt: it is taxed as a separate entity, and grants are generally taxable as income to the recipient. Used this way, a family foundation also becomes a stable vehicle for succession across generations.
Example 2, One-off establishment (endowment) support (illustrative)
The idea. A founder wants the foundation to help relatives at defining life events, a marriage, a first home, the launch of a business, rather than to top up their everyday income.
Purpose. The deed relies on the endowment limb of Article 335 (Ausstattung): a one-off provision at a defining moment. This is exactly the kind of event-based support the law contemplates, “special occasions such as marriage, a child’s birth, or the education of a family member”.
Why the trigger matters. This is the heart of lawful family-foundation design. Swiss case law (BGE 75 II 90 f.) bans the “maintenance foundation”: payments for general, ongoing living costs, or to raise the family’s standard of living or prestige, are inadmissible. A grant tied to a defined event or special need is permitted; a standing monthly allowance is not.
| Lawful (endowment / support) | Not lawful (maintenance) |
|---|---|
| One-off contribution on marriage or a first home | A fixed monthly allowance for everyday living |
| Seed support to start a business | A general income top-up regardless of need |
| Targeted help in genuine hardship or illness | Payments to raise the family’s lifestyle or prestige |
Foundation board and rules. As in Example 1, a mixed family-and-independent board administers the scheme. The statutes list qualifying events, set caps, and require evidence, keeping the board’s discretion firmly inside Article 335.
Supervision and tax. Still a pure family purpose, so the Article 87 exemptions apply and a register entry is required. The tax position is unchanged: not exempt, with funding potentially attracting cantonal gift or inheritance tax. This structure pairs naturally with broader estate planning and wealth transfer and with the asset-protection rationale for holding wealth in a separate entity.
Example 3, Family plus charitable approach (illustrative)
The idea. A founder wants to do two things: support descendants’ education, and give to public causes the family cares about.
The legal pivot. This is where founders most often go wrong. As soon as a foundation pursues a genuine public-benefit (charitable) purpose, or benefits people outside the defined family circle, it is no longer a pure family foundation. It becomes a mixed, and therefore ordinary, foundation. The consequence is significant: an ordinary foundation is supervised by the ESA, must appoint an auditor, and is entered in the commercial register. The Article 87 exemptions that make a pure family foundation light-touch simply fall away.
Two ways to structure it.
- One mixed foundation with both purposes. Workable, but it carries full supervision and audit, and the private and public aims must be clearly delineated in the deed.
- Two foundations, a pure family foundation for the descendants and a separate charitable foundation for the public-benefit giving. This is often the cleaner route: each vehicle keeps its own status, and only the charitable one can qualify for tax exemption.
Tax reality. Only the genuinely charitable element can be tax-exempt, and only on cantonal approval. The family side remains taxable. If philanthropy is a real goal, our guide on how to create a charitable foundation in Switzerland sets out the public-benefit requirements in full.
Common structural elements across the examples
Despite their different aims, all three illustrative structures share the same building blocks:
- Founder and endowment, assets irrevocably dedicated; the founder gives up ownership.
- Purpose clause, drafted to fit one or more Article 335 limbs (education, endowment, support).
- Foundation deed and statutes, the governing documents that fix the purpose, beneficiary circle and distribution rules.
- Foundation board (Stiftungsrat), typically three or more members, at least one Swiss-resident and, as good practice, at least one independent of the family.
- Distribution rules, criteria-based, bounded discretion; never an open-ended “family bank”.
- Commercial register entry, constitutive since 2016; the foundation acquires legal personality on registration.
- Supervision status, exempt for a pure family foundation; full ESA supervision and audit for a mixed/charitable one.
- Tax position, generally taxable; exemption only on a genuine charitable element.
The deed and statutes do the heavy lifting. Get the purpose and distribution rules right and everything downstream follows; get them wrong and the foundation can be challenged. Sound governance, documented board procedures, written distribution criteria and periodic review, is what keeps an illustrative structure a lawful one in practice.
Article 335 compliance in each example
The table below checks each illustrative structure against the rules that matter most.
| Example | Article 335 limb | Maintenance-ban risk | Supervision | Tax |
|---|---|---|---|---|
| 1, Education endowment | Education | Low, criteria-based grants | Exempt (pure family) | Taxable; grants taxed as income |
| 2, Establishment support | Endowment / support | Managed, event-triggered only | Exempt (pure family) | Taxable; funding may attract gift/inheritance tax |
| 3, Family + charitable | Education + public benefit | Low on family side | Supervised + audited (mixed) | Charitable part may be exempt; family part taxable |
Two prohibitions sit behind every row. First, the maintenance ban: no general, ongoing living-cost payments. Second, the prohibition on a family fideicommissum (Familienfideikommiss) under Article 335(2), assets cannot be tied perpetually to a lineage in a fixed succession order.
There is one moving part to watch. The Family Foundation Reform 2024 (Motion 20.4445) would lift the maintenance ban and let family foundations make broader distributions. Both chambers approved it in early 2024, but it is a mandate to legislate, not yet enacted law. Until an amended statute is in force, the limits in every example above still apply. For the clause-by-clause detail, see our explainer on Article 335 of the Swiss Civil Code, set within the wider Swiss foundation law of ZGB Articles 80–89.
Frequently asked questions
Are there real, named examples of Swiss family foundations?
Not usefully. Family foundations are private and, unlike charitable foundations, are not published in a public supervisory directory. That is why responsible advisers present illustrative structures rather than naming families or disclosing confidential cases. The examples on this page are hypothetical but built from the actual law.
What does a typical Swiss family foundation structure look like?
A founder irrevocably endows assets to a foundation with a purpose limited to the education, endowment or support of a defined family. A foundation board (Stiftungsrat) of three or more members governs it under written statutes with criteria-based distribution rules, and the foundation is entered in the commercial register.
Can a Swiss family foundation pay a monthly allowance?
No. Under current law, payments for general, ongoing living costs (maintenance) are not permitted. Distributions must serve education, endowment or genuine support, typically tied to a defined event or special need. The 2024 reform aims to relax this, but it is not yet in force.
Can one foundation be both a family and a charitable foundation?
It can, but it then counts as a mixed, ordinary foundation: it is supervised by the ESA, must appoint an auditor, and is registered like any other. Many founders instead run a pure family foundation alongside a separate charitable foundation, so each keeps its own status and only the charitable one can seek tax exemption.
How much capital does a family foundation example need?
There is no statutory minimum, but the endowment must be adequate to pursue the stated purpose. CHF 50,000 is often cited as a practical floor; in reality a family foundation is usually funded substantially higher so that distributions can be met from income.
What is the difference between the education and the endowment (Ausstattung) limb of Article 335?
The education limb covers ongoing support for schooling, university, vocational training and professional development; payments recur as long as the beneficiary is in education. The endowment (Ausstattung) limb is a one-off provision made at a defining life event, a marriage, the birth of a child or the launch of a business, rather than continuous support. The two are distinct: a deed that funds a child’s entire university career relies on the education limb; a single grant on graduation to start a firm relies on the endowment limb.
Does a pure Swiss family foundation need a statutory external auditor?
No. Under Article 87 of the Swiss Civil Code, a pure family foundation is exempt from the requirement to appoint an external auditor. The foundation board is still responsible for proper bookkeeping, informal accounts are no longer acceptable since the 2016 reforms, but there is no obligation to have those accounts reviewed by an independent auditor. A mixed (partly charitable) foundation loses this exemption and must appoint an auditor like any other supervised foundation.
When does adding a charitable purpose change the legal status of the foundation?
As soon as a foundation pursues a genuine public-benefit purpose, or extends its benefits to people outside the defined family circle, it crosses the line from a pure family foundation to an ordinary (mixed) foundation. That change triggers full supervision by the Federal Supervisory Authority for Foundations (ESA), a mandatory external audit, and registration in the commercial register on the same footing as any other foundation. The transition is not merely administrative; it alters the governance, cost and tax position of the vehicle.
Can the founder or a family member sit on the foundation board?
Yes. Swiss law does not bar the founder or family members from serving on the Stiftungsrat. In practice, however, the Swiss Foundation Code 2021 recommends that at least one board member be genuinely independent of the founder and the family. An independent member supports impartial decision-making on distributions, reduces the risk that the board is treated as an alter ego of the founder, and improves the foundation’s credibility if its governance is ever challenged before a court.
What happens to a family foundation if the family line dies out?
If the purpose of the foundation can no longer be fulfilled, for example, because all eligible beneficiaries have died and no successor class is defined, the foundation faces dissolution. The foundation board must notify the commercial register, and the assets will be distributed in accordance with the deed or, where the deed is silent, as determined by the court. A well-drafted deed therefore includes a residual-purpose clause that directs the remaining assets either to a charitable cause or to a defined category of secondary beneficiaries so that the outcome is predictable rather than left to judicial discretion.
Is the Family Foundation Reform 2024 already in force?
No. Both chambers of the Swiss Federal Assembly approved Motion 20.4445 (the “Burkart motion”) in early 2024, mandating the Federal Council to draft legislation that would relax the maintenance ban and allow broader distributions from family foundations. That mandate is not itself a statutory amendment. Until a new or amended Article 335 enters into force, which has not yet happened, the current rules, including the prohibition on general maintenance payments, continue to apply to every existing and new family foundation.
Are Swiss family foundation rules different from those in Liechtenstein?
Yes, in material ways. Liechtenstein’s foundation law is broader and permits a family foundation to make general welfare distributions without the Swiss Article 335 maintenance ban; Liechtenstein foundations also benefit from a different supervisory regime and tax treatment. Swiss family foundations are governed by the Swiss Civil Code (ZGB) and are strictly limited to the education, endowment and support purposes described there. Founders choosing between jurisdictions should compare not only the legal rules but also the respective tax treaties, governance requirements and the long-term credibility of the jurisdiction.
Speak to a Swiss foundation lawyer
If one of these illustrative structures resembles what you have in mind, our Zug-based team can test it against your own circumstances and draft a deed that holds up under Swiss law. Book a consultation.
This article is general information and not a substitute for formal legal advice. The examples are illustrative and hypothetical. Foundation, tax and succession outcomes depend on your specific circumstances; please consult us before acting.
Sources
- Natalie Peter, “Family Foundations in Switzerland”, University of Zurich / Trusts & Trustees (2020), Article 335 permitted purposes (education, endowment, support); prohibition of family fideicommissa. https://www.ius.uzh.ch/dam/jcr:a1562aba-eb57-4f34-9fde-39eed8176fa2/Trusts&Trustees%206.%20Juli%202020.pdf (accessed 4 June 2026)
- MME, “Family Foundations from a CH and FL Perspective”, Art. 335(1) limits; maintenance ban (BGE 75 II 90 f.); fideicommissum prohibition (Art. 335(2)); permissible special occasions. https://www.mme.ch/en/magazine/articles/family-foundations-from-a-ch-and-fl-perspective (accessed 4 June 2026)
- Online Kommentar zum Schweizerischen Privatrecht, “Art. 87 CC”, pure family (and ecclesiastical) foundations exempt from supervisory authority and from appointing an auditor; mixed foundations treated as ordinary. https://onlinekommentar.ch/en/kommentare/zgb87 (accessed 4 June 2026)
- Wilhelm Avocats, “The family foundation in Swiss law … asset-planning purposes”, pure vs mixed family foundation; mixed foundation must register, be supervised and appoint an auditor. https://www.wg-avocats.ch/en/news/commercial-law/the-family-foundation-in-swiss-law-can-be-an-attractive-solution-for-asset-planning-purposes/ (accessed 4 June 2026)
- CMS, “Foundations under Swiss law: an overview”, possibility and treatment of mixed-purpose (family + charitable) foundations. https://cms.law/en/che/legal-updates/foundations-under-swiss-law-an-overview (accessed 4 June 2026)
- Global Law Experts, “Family Foundations Switzerland”, exhaustive permitted purposes; restrictive Federal Court reading; sample purpose-clause practice; no tax exemption. https://globallawexperts.com/family-foundations-switzerland/ (accessed 4 June 2026)
- Deloitte Switzerland (Tax & Legal blog), “Registration of family foundation with the Commercial Register by 31 December 2020”, 2016 registration obligation and transitional deadline. https://blogs.deloitte.ch/tax/2020/10/registration-of-family-foundation-with-the-commercial-register-by-31-december-2020.html (accessed 4 June 2026)
- PwC Switzerland, “Opportunities for the Swiss family foundation”, Article 335 maintenance ban; tax treatment; 2024 reform. https://www.pwc.ch/en/insights/regulation/new-opportunities-for-the-swiss-family-foundation.html (accessed 4 June 2026)
- Reichlin Hess / Mondaq, “No Swiss Trust – But Liberalisation Of The Family Foundation”, Motion 20.4445 (Burkart); chamber approval in 2024; Federal Council mandated to draft a bill. https://www.mondaq.com/trusts/1471212/no-swiss-trust-but-liberalisation-of-the-family-foundation (accessed 4 June 2026)
- SwissFoundations, “Swiss Foundation Code 2021”, governance principles, board composition and independence recommendations. https://www.swissfoundations.ch/wp-content/uploads/2021/06/9783727206849.pdf (accessed 4 June 2026)
