Secure the effective clause
Collect the foundation deed, supplementary deed and amendments in chronological order.
Only the effective version shows which person or order of succession applies.
Legal basis: Section 5 PSG, Section 9 PSG
Beneficiaries
Beneficiary expectancy after death: interpreting a successor clause
How a successor clause works after a beneficiary dies, when an expectancy arises and which deed provisions and evidence govern succession.
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14 September 2026, Mag. Bernhard Brandauer, Rechtsanwalt
If a named beneficiary of a private foundation dies, a successor clause determines whether and when another person takes that position. A mere expectation of becoming a beneficiary later still requires a careful reading of the clause.
The interpretation depends on the wording of the effective foundation deed, the occurrence of the stated event and any conditions attached to the succession. The successor may be identified directly, may have to provide further evidence or may have to be selected by the body appointed in the deed.
This article deals only with a successor clause following the death of a beneficiary. General beneficiary determination, amendment of the beneficiary class and a particular distribution are separate matters.
The successor clause must first be read as part of the foundation deed
The successor clause must first be read as part of the foundation deed
Section 5 PSG links beneficiary status to designation in the foundation deed or, where no designation exists, to determination by the body appointed for that purpose or by the foundation board. Section 9(1) no. 3 PSG requires the deed to designate the beneficiary or name a body that will determine the beneficiary. A successor clause must be placed within this documentary framework.
If the deed already states that a particular person succeeds the former beneficiary on death, the clause points to a deed-based replacement rule. The practical review then focuses on the triggering event and the conditions attached to the rule. Death alone does not show that every condition has been met.
A deed may instead use open wording such as “suitable successors” or refer to a later selection. The scope of that discretion must then be established separately. A specific person cannot be inferred from such wording without reviewing the authority and selection criteria.
Classifying the clause
Three forms of succession after death
The wording of the deed determines which review follows the death.
| Provision in the deed | Question after death | Next step |
|---|---|---|
| Named replacement person | Has death occurred and are the stated conditions fulfilled? | Secure the deed version, prove the event and record the status |
| Order of succession or class named | Which person satisfies the order or class condition? | Apply the clause and document the relevant facts |
| Selection by an appointed body | Which body may select and what criteria limit it? | Record authority, selection and any determination separately |
“Expectancy” refers here to the anticipated later beneficiary position. It must be distinguished from an existing claim to a particular distribution.
The death must be established as the triggering event
The death must be established as the triggering event
A successor clause may refer to death, a waiver, an effective disclaimer or several events together. The relevant trigger must be identified from the wording of the deed. A temporary refusal or the failure to draw a benefit cannot simply be treated as death.
The file should bring together the deed, proof of death and the relevant chronology. It is also important to check whether the clause refers to death before or after a particular determination, before a distribution or upon the loss of beneficiary status. Those time references may change the order of the review.
If the clause does not address a special situation clearly, the gap should be stated and interpreted in the context of the complete documentary scheme. A private arrangement among relatives cannot replace the foundation deed.
Succession within the foundation and inheritance are separate issues
Succession within the foundation and inheritance are separate issues
The successor clause regulates who may become the next beneficiary of the foundation. It does not automatically make the deceased beneficiary’s legal successors beneficiaries. The death also does not, without further review, dispose of every legal position that may already have arisen.
The analysis should distinguish an expectancy, an already established status and a specific distribution claim. The foundation deed may attach different consequences to each situation. The wording, structure and time-specific legal effect of the deed remain central.
If a claim or a distribution resolution already existed at the time of death, it requires a separate review from future succession. The clause identifying the next beneficiary cannot silently resolve an outstanding payment or estate issue.
Review path
From proof of death to a reliable succession record
A defined sequence prevents the successor from being treated as a beneficiary too early.
- 01Deed01Deed
- 02Event02Event
Prove the trigger
Record the date of death and the event described in the clause.
Check whether the clause refers to death alone or to an additional condition. - 03Conditions03Conditions
Check the successor
Review identity, order, family line or other clause-based requirements.
The replacement person must satisfy the conditions written into the deed. - 04Authority04Authority
Clarify the decision path
Separate a direct replacement rule from selection by an appointed body.
Where a body is appointed, record its task, limits and resolution basis. - 05Result05Result
File status and open issues
Record succession, unresolved points and any later distribution separately.
Only the clarified position should be used in registers, communications and later resolutions.
The order of succession must follow from the clause
The order of succession must follow from the clause
A succession rule may name one replacement person, several people in an order or a class defined by characteristics. Where an order is used, the first person must be checked at the time of death. The next person may become relevant only if the first person also fails to qualify.
Terms such as “children”, “descendants”, “family” or “issue” require interpretation in the context of the deed. The clause may refer to a generation, a particular line or a separate allocation. A general family-law assumption does not replace the wording of the deed.
Uncertainty about simultaneous death, prior death or the order of several successors should be stated in the result. The foundation should not place a presumed ranking into its records and resolutions.
A successor clause may require a further determination
A successor clause may require a further determination
The deed may identify the successor directly after death. It may also name a class and appoint a body to select or determine the next person. Those designs lead to different next steps.
If the replacement person is immediately identifiable from the clause, the file should describe the process as applying the existing succession rule. If an appointed body must select a person from a class or make a binding determination, its authority and the limits of its task require an additional review.
Section 9(2) no. 10 PSG permits the deed to specify the beneficiary or further beneficiaries in greater detail. This allows a differentiated succession rule. The individual clause remains the starting point; a general replacement rule cannot be imported into every deed.
Important: The death of a beneficiary starts the succession review. It does not identify the next person by itself, create an inheritance position automatically or replace a decision required by the foundation deed.
Initial assessment
How should the successor clause be applied after death?
These questions address only the replacement and succession provision.
Already know you want to get in touch? Go straight to the enquiry form.
Does the effective foundation deed contain a successor or replacement clause?
All paths at a glance
Overview of all answers.
The successor clause can be applied and recorded.
Place the effective deed, proof of death, fulfilled conditions and directly identified replacement person in one succession file. Keep later distribution questions separate.
The documentary basis for succession remains open.
Collect the foundation deed and supplementary deed with all effective amendments. Treat a person as successor only once the replacement rule can be traced to the effective version.
The trigger and its timing must be evidenced first.
Check proof of death and whether the clause requires an additional condition. Identify the successor only after the triggering event and its timing are clear.
The appointed body and the limits of its task require review.
Identify the body appointed in the deed, its criteria and the required resolution form. Record the selection separately from a later distribution and from any inheritance issue.
Frequently asked questions
Beneficiary expectancy after death: interpreting a successor clause
Does another person automatically succeed a deceased beneficiary? +
That depends on the effective foundation deed. A successor clause may identify a replacement person, set an order or appoint a body to select the successor. Death alone does not replace this review.
Is the successor automatically an heir of the deceased beneficiary? +
No. Succession within the foundation and inheritance are separate issues. The deed may contain its own replacement rule, while existing claims and estate questions require a separate review.
What does beneficiary expectancy mean here? +
It describes an anticipated later beneficiary position that becomes relevant only when the condition stated in the deed occurs. Whether an earlier claim or an inheritable legal position already exists depends on the deed and the specific right involved.
Which documents does the foundation need? +
It should bring together the effective deed, supplementary deed and amendments, proof of death, the clause requirements, identity and other evidence concerning the successor and the competent resolution or determination.
What if the clause names a class rather than one person? +
First check whether the next person can be identified directly from the order and characteristics. If the deed requires selection or determination by a body, its authority, criteria and resolution must be documented separately.
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Topics
Private foundationBeneficiaryBeneficiary expectancySuccessor clauseDeathFoundation deedSection 5 PSG
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