Succession Law in Italy

How does Italian succession law work?

Succession law in Italy is based on the Roman Law principle which protects close members of the family. This partially limits the right of a testator to dispose of assets.

Testamentary Succession is the assignment of the hereditary assets in compliance with the wishes of the testator as set out in an Italian will whereas in the absence of a will, inheritance follows the principles of legal succession. In other words, if the deceased was intestate, Italian succession law determines the distribution of the estate.

Forced Heirship in Italy

Where there is no will, Italian succession law gives rights to a number of legitimate heirs. These heirs have rights to the assets of the deceased. Such heirs are the spouse of the deceased and close relatives up to the 6th degree of connection.

Succession law in Italy reserves a significant quota of the inheritance to closest relatives. The deceased’s spouse, ascendants and descendants are all, “forced heirs”. This means that the testator cannot exclude them with their will.

When drafting an Italian will, the testator is free to dispose of a part of his assets known as a, “disposable quota”. Thus, a testator may only assign part of their assets to non-relatives.

Applicable succession law in Italy

Italian succession law is based on the unity of inheritance which highlights the difference between movable and immovable assets. The law of the last domicile or citizenship of the deceased party is applicable to non-property assets, while the law of the country where the property is located is applicable to property assets.

Therefore, properties in different countries will be subject to the law of the country where each property is located.  The succession procedure closes once estate tax has been paid and all assets, rights and pending payments have been transferred to the heirs. Partition of an estate is either through mutual agreement or as consequence of judicial proceedings.

It is also worth mentioning that non-Italian nationals may be subject to the testamentary succession laws of their own country. If the deceased was resident in Italy at the time of death, Italian Inheritance law applies to the deceased’s worldwide assets. Whereas if the deceased lived outside Italy, Italian inheritance law is only applicable to assets in Italy.

For foreign nationals resident in Italy, the introduction of EU Succession Regulations, known as Brussels IV, may also impact how you manage your cross-border succession. 

Finally …

People put off estate planning because they think they do not own enough, they are not old enough, it will be costly or confusing, they will have plenty of time to do it later, they do not know where to begin or who can help them, or they just do not want to think about it.

Estate planning should be an ongoing process, not a one-time event. You should review and update your will as your family and circumstances change. This would include owning or purchasing a property in Italy. We recommend you seek independent legal advice regarding your personal situation.

At De Tullio Law Firm, we have over 55 years of expertise managing cross border succession matters throughout Italy. Our firm is also a full member of STEP, the world’s leading association for trust and estate practitioners.

Please contact us if you are buying or already own an Italian property or have any questions about your estate planning.

 

For more in depth information about Italian succession, you might find our Italian Succession Guide useful. You may also find our info videos helpful.

 

Do You Have A Dormant Account in Italy?

How does Italian law define dormant accounts?

According to Italian law, a dormant account contains a sum over €100 that has not been moved by the owner for a period of 10 years.

A dormant account may be with a bank or other financial institution and can be an account or financial instrument. This includes any inactive deposits in savings account books, bank accounts, postal accounts, shares, bonds and government securities.

Is it true that funds in a dormant account can be transferred into an Italian government fund? 

Rules establish that financial institutions can terminate contractual relationships dormant for 10 years or more with sums of at least €100. These dormant funds transfer to the Italian Ministry of Economy and Finance. Article 1 paragraph 343 Law 2005 n. 266 designates these funds for social purposes. 

However, before any sum devolves into the Italian Ministry of Economy and Finance fund, the owners of a dormant account must receive notification from the financial institution.

Thereafter, owners have a period of 180 days to reactivate the dormant account. Either owners can make a transaction or, they can notify the financial institution of their wish to continue the contractual relationship. 

Even if sums have transferred to the government fund, the account owner may still claim a refund. Owners of dormant accounts have 10 years to claim a refund.

Who is entitled to a refund? 

Provided that the ten year statute of limitation has not elapsed, owners of accounts or their assignees can claim a refund. The ten year statute of limitation starts from the date the financial institution transferred sums to the government fund, or the issuance of a banker’s draft.

How do you get a refund?

First, you will have to prove you are the owner or beneficiary of a dormant account. In order to do this you will need to visit the Consap website. This system will ascertain if a dormant account exists according to the data you provide and permit you to download a refund form, which you will need to fill.

Where you have inherited a dormant account, you will need to provide a self-certification document, which will be verified by Consap.

Owners of dormant accounts should check the Consap website for details or they can send their application to:

Consap S.p.A.

Rif. Rapporti dormienti

Via Yser, 14

I-00198 Roma

or via e-mail to rapportidormienti@consap.it

Claimants will need to supply proof of their right to a refund. The type of documents will depend on personal circumstances. These may include:

– Copy of identity card or other ID of the applicant entitled to refund.

– Copy of fiscal code of the applicant entitled to refund.

– The account owner’s death certificate.

– Copy of savings passbook or of a bank statement.

– Statement attesting heir’s entitlement.

– Statement of termination of contractual relationship by the financial institution.

– Notification of transfer to the government fund.

After verifying entitlement to a refund, Consap will transfer payment through methods such as a bank transfer or a banker’s draft.

What if you have moved or haven’t received bank notification about a dormant account?

First, you should contact the financial institution you think may hold an account to ascertain if you are the owner of a dormant account. Secondly, you should notify the financial institution regarding any change of residence. In effect, notification of a change of residence is sufficient to reactivate a dormant account.

I’ve received a letter from the bank but, the dormant account owner has passed away. 

In this case, it is important to remember that not only the owner of a dormant account can reactivate it. An executor can also do this. If there is no executor, beneficiaries should notify the financial institution of their entitlement to succeed to the deceased’s account. Beneficiaries should present the owner’s death certificate with Italian probate and succession documents.

What if there is more than one dormant account at the same bank?

Owners don’t have to reactivate all their dormant accounts. Reactivating one account is sufficient. For example, if there is a dormant current account and a dormant deposit account, reactivating one will make both active.

Finally …

For more in-depth information about Italian succession, you might find our Succession Guide useful.

At De Tullio Law Firm, we have over 55 years of expertise managing cross border property, succession and estate planning matters throughout Italy. Our firm is also a full member of STEP, the world’s leading association for trust and estate practitioners.

If you would like to discuss anything, you can reach us here for a free consultation.

Buying Italian Property. Advice for Expats

If you are buying Italian property, never sign any paperwork without fully understanding the implications

The most important piece of advice for expats buying Italian property is that they should never sign any paperwork without getting it checked.

If you don’t fully understand all the legal implications of paperwork, your signature could result in potential financial and/or legal problems. In addition, your signature may negate any possibility of complaints at a later date.

We would always recommend that you use an experienced, independent property lawyer to safeguard your Italian purchase. A surprising number of expats buying Italian property don’t use a lawyer. Instead, they take a DIY approach or use someone unqualified such as the estate agent or vendor. It is not uncommon that this ends up being a stressful and expensive mistake.

Expats buying in Italy may encounter language barriers

If you are not a fluent Italian speaker, it’s important to engage a lawyer who speaks your language. This ensures you not only have crucial legal advice but also a someone who can act as a legal translator. As previously mentioned, the issue of signing paperwork is critical. Expats should only sign documents that they fully understand, which may mean that documents need translating. In fact, when you complete the purchase, the Italian notary may require a translation of the deed of sale. In addition, you may also have to engage an interpreter at completion. However, if you have a lawyer who speaks your language, this will not be necessary.

In order to avoid conflicts of interest, the lawyer should be independent of the estate agent and/or the vendor.

Make sure your lawyer has a license to practice. In other words, your lawyer should be a member of the Italian Bar Association. The lawyer should also have public liability insurance.

Estate Agents

It is worth bearing in mind that regardless of how charming and friendly an estate agent is, at the end of the day, an estate agent is a sales person working on a commission from the sale of the property. They are not qualified to provide legal advice and do not conduct due diligence on properties. The base their sales information on what the vendor tells them.

An estate agent may ask you to sign an agent’s brokerage contract, which could include up front fees.

Make sure that your estate agent is from a reputable company. Italian estate agents must register with their local chamber of commerce. They should have a certificate issued by the local town hall as proof of their professional registration.

Surveys

Many expats buying Italian property decide not to invest in the knowledge and expertise of a professional surveyor.

Construction quality varies hugely in Italy and you cannot know everything about a property just from viewing it with the vendor or estate agent. Buyers should ensure the property they want to purchase is actually worth the money they are paying. This means checking there are no fundamental problems. Amongst other things, structure, planning, zoning, ownership and geological location.

Certificate of Habitability

It’s also surprising how many expats buy a property that has neither electricity nor water connections. If a property has no utility connections, it may indicate a problem. It suggests that the property may not have a Certificate of Habitability. If this is the case, the property may never gain mains utilities despite what the vendor or estate agent claims. When it comes to reselling the property, later on, it is likely to be a struggle to find a buyer.

Buying an Italian off-plan property

Expats should exercise caution if buying an off-plan property. There are many risks entailed with buying Italian off-plan property. One of the major risks is that a developer becomes insolvent during the build. Never make large payments as a deposit to secure what appears to be a dream home.

Ensure, amongst other things, that the developer or building company has a building licence for the property before parting with any cash. Don’t be afraid to ask the property developer about their portfolio, their history of delivering quality buildings, on time. Ask for references. If you are buying a resale property, check that there are no hidden fees or legal complications.

Take your time. Don’t be rushed

When buying a property in Italy, don’t rush into a purchase and, never buy a home on impulse. Think long term. Always assess the pros and cons, research the area and understand all the present and future legal and tax aspects.

Familiarise yourself with the process of buying Italian property

Because the process of buying a property in Italy can move quickly and expats should be prepared for the purchase completion taking between four to eight weeks on average.

The purchasing process in Italy is completely different to the UK, the USA and many other parts of the world. First, the buyer makes an offer on the property. If it’s accepted, then the buyer and vendor will sign a reservation offer and the buyer will pay a small deposit. Second, the buyer and seller will sign a preliminary contract at which point the buyer will pay another deposit, usually a minimum of 10% of the sale price. Finally, at completion, the new owners pay the balance of the sale price, along with other costs and taxes.

It is important that expats appreciate all the financial and legal implications of each stage of the process.

Finally …

For over 55 years, De Tullio Law Firm has been providing international clients with independent legal advice. We offer services in all the major fields of Italian law. Our particular expertise is in cross-border real estate, family law and inheritance matters. If you would like more information, or you need advice and support with your Italian property purchase, please get in touch with us.

Usucapione Property Rights in Italy

What are usucapione property rights?

Usucapione property rights in Italy date back to Roman law. The closest terms to Usucapione in common law are limitation of rights and adverse possession.

According to Roman law, so long as someone didn’t take possession of an asset through theft or force, usucapione allowed them to become the lawful proprietor of the asset. The legal owner had a certain period of time to re-claim the asset, but if this didn’t occur, the title passed to the possessor.

Later, Napoleonic law also incorporated Usucapio laws. Today, elements of the legislation still exist in Italian law.

Current usucapione property rights concern the uninterrupted and unchallenged use of an immovable asset by someone who does not actually own the title. This may be land or a building.

Adverse possession is one of the most contentious ways of acquiring a property. Generally, in order to apply to register a title to a property, the adverse possessor of the land or building will have been in possession of, or using the property for 10 years, although there are provisions which extend this to 30 years.

Legally, at the end of the relevant time period, the adverse possessor can apply for a court judgement to become the registered owner of the land or building in question.

Basic requirements of adverse possession

There are five basic requirements that an adverse possessor must meet to successfully claim usucapione property rights:

1. Actual Possession

The adverse possessor must have actual, physical control over the property.

2. Open and Notorious Use

The use and possession of the land must be visible and apparent. This gives notice to the legal owner that someone may make a claim to the property.

3. Exclusive Possession

The adverse possessor cannot occupy the land jointly with the owner or share possession in common with the public.

4. Hostile Possession

Adverse possession must be hostile to the title owner’s interest in the property. The word “hostile” in an adverse possession claim does not mean showing ill will or that the adverse possessor and legal owner are enemies. Rather, it means that the adverse possessor maintains that he or she holds the property as an owner against all other claims to the land.

5. Continuous and Uninterrupted Use

All elements of adverse possession must be met at all times through the relevant period of time. Occasional activity with long gaps in activity therefore fails the test of continuous possession.

Usucapione property rights case

In 2001, a US national inherited a house and land in Italy from an elderly Italian aunt. The nephew had spent many enjoyable summer holidays on the property when he was growing up. He remembered a strip of land between his aunt’s house and the neighbouring property. When his aunt was alive, a neighbour used to cultivate vegetables there. The nephew assumed that the vegetable plot belonged to the neighbour, who was a distant cousin.

Following the aunt’s death, the neighbouring cousin offered to look after everything for the nephew. For many reasons, this seemed like a good idea at the time.  The nephew therefore entrusted the property’s maintenance to his distant cousin. The cousin looked after the American nephew’s property well and continued to use the strip of land between the properties. In fact, the cousin had it fenced and built a patio, barbecue area and a gazebo.

In the summer of 2013, the American nephew retired. He and his wife decided to move to Italy. The nephew decided to have his property surveyed. He discovered in fact, that he owned the land between his and the neighbouring cousin’s property. The question was, did the nephew really own the land anymore? Because of  his cousin’s open and unchallenged use of the property for over 30 years, if the case went to court, it would likely rule against the nephew’s property rights.

Do you find yourself in a similar case?

If you are an Italian property owner, and you do not dispute the use of your property, where do you stand? You, as the legal owner, may well be deemed to have abandoned your property rights. There are several elements needed for adverse possession to apply for title transfer and registration:

– Length of time (10 – 30 years depending on the case).

– Use of the property must be open for all to see.

– Possession must be hostile to the legal owner of the land.

– Gaining a title to property through usucapione requires a court judgement.

As we have seen, usucapione can have a dramatic impact on land ownership rights. An encroachment could result in the title of your property being transferred to an adverse possessor. Under these circumstances, you might have to bring a lawsuit for trespass in order to prevent someone from obtaining the title to your property.

For example, someone who has no legal entitlement to a parcel of your land may have been openly using that land to cultivate vegetables for a decade or more. You, as the legal owner of the land, may even have periodically received some of the produce as a gift. From a legal point of view, this could imply your tacit agreement to the cultivator’s adverse possession of a piece of your land.

Conducting appropriate property searches is vital

If you are considering purchasing property or land in Italy, it is important that you don’t sign any documents or paperwork before conducting appropriate searches. Amongst other things, you should check whether there are any usucapione issues. It is vital to understand exactly what you are buying, where the boundaries are and what type of easements, such as rights of way exist.

Finally …

Purchasing a property anywhere is a major financial commitment for most people. Make sure you safeguard your conveyancing. We would always recommend that you seek independent legal advice before making any legally-binding commitment.

For over 55 years, De Tullio Law Firm has been providing international clients with independent legal advice throughout Italy. We are specialists in cross border property, inheritance and family law.

If you would like further information about buying an Italian property, we are here to help. We can guide you through the whole process or even organise the whole process on your behalf. Get in touch with us for a free preliminary consultation.

For more comprehensive information about the Italian property purchasing process, you might like to read our guide. You may also like to watch our info videos about Italian property law.