Action should be taken now to benefit from the new 2015 European Inheritance Rules. According to The European Commission some 450,000 cross-border successions occur in the EU each year, estimated to be worth in excess of €120 billion. As it stands, many countries in the EU, including Italy, have laws governing ‘forced heirships’ along with different opinions as to whether inheritance is dealt with under local law, or the law of the nationality of the deceased. To somewhat solve this confusion and prevent disputes, effective August 17th 2015 new rules will allow individuals across participating EU member states to choose which country jurisdiction will apply to the devolution of estates. Read more
Should the heirs, appointed by the Will or by law, be two or more, a condition of joint ownership of rights and duties concerning the inheritance is established among them. The assets and the real rights of the deceased compose the estate: the co-heirs take part in the estate in proportion to their inheritance quota, and, in the same proportion, they acquire all the credits and take over all the debts of the deceased.
Partition of the estate
The partition of the estate is aimed to cease the status of communion of assets on the estate among all those entitled (parties who take part in the communion). It is to be noted that every co-heir has the right to ask at all times for the partition of the common property, except as otherwise established by the testator. Furthermore, it is compulsory that all the co-heirs or their universal or special successors (legatees) must take part in the partition. The absence of some of the entitled will entail the invalidity of the partition transaction, which cannot be rectified with the following joining by the missing co-heirs.
According to the Italian national legislation, the partition of the estate can be executed by means of three methods:
- Amicable (bargaining) partition
- Judicial partition
- Testamentary partition
The amicable partition is a contract of which the purpose is to convert the co-heirs’ rights on ideal quotas (known as legitimate quotas) of the estate into rights on single assets forming part of the same, so that the value of the assets individually assigned (known as de facto quotas) equals the value of the joint ownership quotas.
Should the co-heirs disagree on the opportunity or the way to execute the partition, each of them can request it to the judicial authority. The partition will be executed by means of the following stages:
- Formation of the inherited estate, including the assets which have been gifted to the co-heirs by the deceased
- Appraisal of the assets, according to their market value. The testator, however, can identify a person for the execution of the appraisal. If assets of the same category are divided, the estimate is not needed. In the other cases, the estimate of the single dividend assets is essential in order to create portions of value corresponding to the quota
- Possible sale of indivisible assets: Before creating the portion, it may be necessary to sell the real estate units non-divisible to one-third, or to assign them to a co-owner in return for a corresponding amount of money to be shared among the co-heirs.
- Formation of the portions due to every heir, which are as many as the co-owners in proportion to the respective quotas.
- Hotchpot: consisting in the fact that those who obtain the inheritance have to confer to the inheritance estate all the assets which have been gifted to them when the deceased was alive, in order to share them with the other co–heirs, so as to prevent an unequal treatment among the co-heirs.
- Assignment or attribution of the portions. The assignment occurs when the portions are equal, by drawing lots, while the attribution occurs when the portions are not equal.
Even without indicating the quotas, the testator can create the portions to assign to each co-heir, or he/she can simply lay down the rules in order to create them; in such case, an amicable or judicial partition will take place all the same, in which the rules laid down by the testator will be binding, unless the effective value of the assets does not correspond to the quotas established by him/her.
Please note, any statement made in this article is intended to be a general practical introductory explanation only and not formal legal advice. This firm accepts no liability or any responsibility for any statement made.