International Succession

Foreign nationals with a second home in Italy are subject to international succession procedures

International succession pertains to the estate of a person who dies in a country other than that of their nationality or residence.

It is likewise applicable to someone who leaves movable or immovable assets in a country other than that of their citizenship or residence. If, for example, you are a foreign national who owns a second home in Italy, your estate will be subject to international succession procedures.

In August 2015 new EU regulations governing inheritance came into force. These regulations, known as Brussels IV, aim to simplify and accelerate international inheritance matters and make cross-border succession procedures more efficient. Prior to the introduction of Brussels IV, international succession laws differed from country to country.

Since its introduction, there have now been a number of cases regarding the interpretation of the new EU regulations. One such international succession case came to court in Salerno in 2018.

The case involves two brothers who co-owned three properties in Italy. In 2016 one of the brothers, an Italian citizen, died in New York where he was a resident. He died intestate meaning he didn’t leave a Will.

One of the decedent’s six brothers is a co-owner of the three Italian properties. He took legal action to wind up the Italian property co-ownership. He subsequently filed an inheritance claim for his brother’s share in the property.

Article 24 paragraph 1 of EU Regulation 1215/2012 (so-called “Brussels I bis”) governs dissolutions of co-ownerships. It entrusts such cases to the court of the country in which the property is located. In this case therefore, Italy.

To make life simpler for those you leave behind, it is crucial to have a Will.

For estate divisions, the court in Salerno applied the Brussels IV regulation.

Article 4 of the regulation establishes that the jurisdiction which rules on the succession as a whole, is that of the country where the deceased was habitually resident at the time of death. However, Article 10 provides for subsidiary jurisdiction of courts in which the estate is located – if the deceased was a national of that country at the time of death.

Returning to the case in question. The court of Salerno considered that the deceased was habitually resident in the State of New York. It therefore ruled that the case should be governed by the law of New York State.

Adding to the complexity of this case, rules of private international law are also relevant. The rules governing New York private international law provide that the law of the place where the property is located applies to successions concerning immovable assets.

The judge has adjourned the case until parties produce U.S. regulatory sources. This is something of a landmark case. It sets a precedent inasmuch that judges have the power and duty to ascertain foreign regulatory sources of their own volition.

Although Regulation 650/12 aspires to harmonise international succession, in terms of effectiveness it is confusing and open to interpretation.

For international succession and division of estates, Italian inheritance law specifically provides for rights to so-called, “forced heirs”. Their inheritance quota is guaranteed.

However, in countries with common law systems, such as the UK and the USA, testators can rule on how estates should be divided.

Brussels IV allows testators to make a choice of law in their Will

International Succession Planning

Article 22 of Brussels IV allows individuals resident overseas to elect which country law should govern their inheritance.

Where individuals have multiple nationalities, they may elect to have any one of their nationalities apply to their Italian assets.

In effect, this means that you can avoid any jurisdictional confusion after your death. However, you need to take action by making, “Choice of Law Codicil” in your Will.

Finally …

If you are in the process of drafting, or reviewing, your Will, you should consider aspects such as foreign matrimonial regimes, usufruct, tax consequences, joint ownership structures and other foreign proprietary rights before deciding which law to apply to the devolution of your estate.

Should you need further information concerning the topic, our legal professionals will be happy to discuss your situation. Please contact De Tullio Law Firm at the following email address: info@detulliolawfirm.com

 

You may also be interested in Applying A Power of Attorney in Italy

Benefit of Inventory. Accepting An Italian Inheritance

How to protect your personal assets from debts associated with an Italian inheritance

At De Tullio Law Firm, we understand that when a loved one dies there are many issues that need attention at an extremely difficult time. Having to make funeral arrangements, notifying friends and family and the grieving process.

On top of this, there are also critical legal matters that require consideration.

If your loved one left assets not only at home but also in Italy, estate administration is more complex. As cross border legal specialists in Italy, this is an area in which our legal team can help. Should you wish to discuss your situation with us, please get in touch.

Italian estate inheritance options available to heirs

Inheritance consists of assets (moveable and immovable property) and liabilities (debts).

Italian law stipulates that an heir becomes responsible for settling any debts the decedent may have left.

The acceptance of an inheritance sometimes presents a risk. If the value of assets included in the inheritance is less than liabilities, heirs are responsible for settling debts from their personal finances.

In Italy, inheritance always requires acceptance or refusal. Italian law provides three inheritance options in this regard.

Unconditional acceptance of the inheritance

An heir inherits all the assets subject to succession. The beneficiary assumes personal liability for the decedent’s liabilities, even if debts exceed the value of the assets. An heir therefore becomes liable in a personal capacity (with their own finances) for any portion of the decedent’s debts that the inheritance does not cover.

Refusal of the inheritance

This means an heir completely renounces the succession. In effect, an heir renounces all rights to the inheritance. The statutory arrangement is that the share of inheritance is then subject to a ‘right of representation’. Thus it passes to an heir’s children, and if there are no children, to any other heirs.

Acceptance under the benefit of inventory (accettazione con beneficio di inventario)

This is usually the best option if you are uncertain whether the inheritance comprises debts and other succession charges.

What is the acceptance of inheritance under benefit of inventory?

According to Article 490 of the Italian Civil Code, acceptance under the benefit of inventory is an act by which a person declares the acceptance of inheritance but wants to protect personal assets from becoming entwined with those of the deceased.

Usually, the assets of the heir and that of the deceased are merged into one, so not only does the heir inherit movable and immovable assets, but also any debts and liabilities.

Whoever accepts an inheritance must settle debts, so caution is advised. In order to protect an heir’s personal assets, the acceptance of the succession is subject to a condition, the benefit of inventory. This permits the heir to assess what the inheritance actually comprises before deciding whether or not to accept it.

There is no obligation for an heir to accept the inheritance. Drawing up an inventory of debts and assets allows the heir to make an informed decision about the inheritance: either to accept and pay debts from the assets inherited, or to refuse the inheritance because debts outweigh inherited assets.

Effects of acceptance under benefit of inventory

The first advantage is that the estate of the deceased remains distinct from the estate of the heir. In essence, this means that an heir does not have pay the decedent’s debts for a value greater than that of the inherited assets. In addition, creditors cannot recoup any debts from the heir’s personal assets.

How to accept the inheritance under the benefit of inventory

To accept an inheritance using the benefit of inventory, there are some fundamental requirements. Article 490 of the Italian Civil Code covers the procedure.

Firstly an heir has to file a declaration written in Italian, with a notary or a clerk of court in the locality where the succession procedure is taking place. Secondly, a detailed inventory of all the assets belonging to the inheritance is necessary.

Within a month of filing the above mentioned declaration, the notary or clerk must transcribe it in the relevant land registries. This transcription then permits the heir to pay the creditors and the bequests.

Finally …

If you are in the difficult situation of considering whether to refuse or accept an Italian inheritance, using the option of benefit of inventory may be the way forward for you.

You may also be interested in Inheritance Law and Taxes

Making An Italian Will. Information And Template

A Will determines distribution of your assets

Making an Italian Will

By making an Italian Will, you can decide how to divide your estate after your death. In addition, it allows you to be certain that your heirs don’t pay more Inheritance Tax than necessary.

What is an Italian Will?

A Will is a legal document. The Will writer, known as the testator, establishes in written form, how to distribute their estate after death (article 587 of Italian Civil Code).

Anyone over the age of 18, who is not legally incapacitated, can write an Italian Will. Incapacity is defined by Italian Civil Code.

Italian law states that a Will is revocable at any time. Testators’ rights to dispose of their assets is protected until their last breath.

The content of an Italian Will is essentially patrimonial. That is to say, it deals with the distribution of a testator’s inheritable assets. However, the law states that testators can also make dispositions of a non-pecuniary nature in a Will. For example, the recognition of a natural child.

Why is making an Italian Will important?

To understand how Italian inheritance law works, you may like to read our comprehensive guide on this subject.

You should not underestimate the  importance of making an Italian Will.

The laws governing forced heirship are very strict in Italy. Because of this, anyone wishing to derogate from the rules should seek legal advice in order to ensure their plans comply with Italian and European succession rules.

Not only does a Will enable a testator to assign assets to beneficiaries, it can also be useful in preventing conflict among heirs. In certain cases, it can also permit a reduction in inheritance tax payments.

Because it makes life easier for those you leave behind, if you own property in Italy, we would advise that you make an Italian Will.

How do you make an Italian Will?

When making an Italian Will, it must be in Italian. For an Italian Will to be legally valid,  a testator must hand write, sign and date the document.

For straightforward cases, testators can use a very simple format with wording such as this:

I, the undersigned, …………………. (indicate surname, name, place and date of birth, residence) revoke all my previous testamentary dispositions. I dispose of my patrimony at the time of my death as follows.

I appoint as universal heir of all my worldly goods …………. (indicate surname, name and any relationship of kinship. If it is not a relative, you should also indicate place and date of birth).

I give to ………… (indicate surname, name and any relationship, if it is not a relative, it is appropriate to indicate place and date of birth) the following assets: …………………….. (clearly specify the assets).

Date

Signature

Finally …

Even if you think your situation is straightforward, it may not be. If you own property in Italy and elsewhere, this adds a layer of complexity. It will require cross border legal expertise. We therefore recommend that you seek independent legal advice regarding your personal circumstances.

At De Tullio Law Firm, we have over 55 years of experience managing cross border and Italian inheritance matters throughout Italy. We are a member of STEP, the world’s leading professional association for trust and estate practitioners.

If you would like to discuss your estate plan with us or if you are considering making an Italian Will, please get in touch at: info@detulliolawfirm.com

 

You may also be interested in Do beneficiaries have to pay taxes on inheritance?

Legitimate Heirs. Rights of “Forced Heirs” in Italian Inheritance

Italian law provides for legitimate heirs

legitimate heirs in Italian inheritanceAlthough a testator may have expressed wishes in a Will, certain people have a legal right to receive at least a portion of an Italian inheritance. These are all so-called, “legitimate heirs”, or “forced heirs”.

The testator only has one portion of assets to dispose of freely, which varies between a quarter and a half of total assets. This is defined as the, “available quota”.

The remainder of an Italian inheritance is legally designated. This portion goes to a testator’s spouse (or registered partner), children and, in the absence of children, if they are still alive, the testator’s parents.

Legitimate Heirs: what are inheritance quota rights?

If there is only one child, s/he is due at least half of the decedent’s total assets. This becomes a third of assets if the decedent’s spouse or registered partner is still alive. A child would therefore be entitled to inherit a third of the assets.

In the case where there are two or more children, they divide two thirds of the inheritance between them. A surviving spouse or registered partner is entitled to a quarter of the assets, children’s quota decreases to half of the assets. If one or more children pre-decease the testator or renounce an inheritance, their descendants qualify to receive that entitlement.

Where the decedent and surviving spouse or registered partner have no children, the surviving partner is entitled to at least half of the assets.

Parents and other ascendants of the deceased only become legitimate heirs in the absence of descendants. Parents have the right to a third of the inheritance, reduced to a quarter if the decedent’s spouse or registered partner is still alive. The latter is legally entitled to half of the assets.

Regarding property pre-owned by the deceased or owned in common by the spouses or registered partners. The surviving spouse or registered partner has the right to (i) remain in the family house and, (ii) retain all movable assets in the property. In this case, if there are any other co-heirs, there is no requirement to pay property tax on their portion of inheritance. Tax liabilities remain with the spouse or registered partner, even if s/he renounces the inheritance. 

What about the inheritance rights of separated couples?

In cases of a legal separation, the spouse or registered partner loses inheritance rights if a court judgement finds s/he was to blame for the breakdown of the marriage or registered partnership.

Surviving spouses or registered partners who have no court judgement regarding their separation are not legally separated. They therefore have the same inheritance rights as a non-separated spouses and partners. This would also be the case where no assignment of responsibility for the breakdown of the marriage or registered partnership exists.

In other words, the loss of the right to an inheritance relates only to court-issued judgements of separation. The law, in accordance with article 151 of Italian Civil Code, deems a couple to still be in the marriage or registered partnership if their separation was a personal decision and did not go through the courts.

Legitimate heirs and reserved quotas in Italy

Legitimate heirs Reversed quotas and availability
Spouse (or registered partnership) (in the absence of children and parents) 1/2 to the spouse (or registered partner) = 1/2 available quota
One child (in the absence of a spouse or registered partnership) 1/2 to the child = 1/2 available quota
Two or more children (in the absence of a spouse or registered partnership)  2/3 to children (divided into equal parts) = 1/3 available quota
Spouse (or registered partnership) and only one child 1/3 to the spouse (or registered partnership) 1/3 to the child = 1/3 available quota
Spouse (or registered partnership) and two or more children 1/4 to the spouse (or registered partnership)  1/2 to children (divided in equal parts) = 1/4 available quota
Spouse (or registered partnership) and parents (in the absence of children)  1/2 to the spouse (or registered partnership)  1/4 to parents (divided into equal parts) = 1/4 available quota
Parents (in the absence of children and spouse or registered partnership)  1/3 (divided into equal parts) = 2/3 available quota
If there is a Will, the law reserves a quota of inheritance only for the spouse (or registered partner) and children (if the deceased had no children there is a reserved quota for parents who are still living), so if the Will is valid, other relatives cannot make claims.  

 

Finally …

Italian inheritance is a complex matter. In addition, if you own assets in more than one country, this can further compound the complexity. We recommend you seek independent legal advice regarding your personal situation. If we can be of assistance, please get in touch.

For more information about Italian succession and inheritance, you may find our Italian Succession Guide useful.

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

 

Italian Estate Tax

Italian estate tax (imposta di successione)

Italian estate taxAlthough the government abolished Italian estate tax in 2001, it subsequently reintroduced it in 2006.

Italian estate tax is therefore applicable to succession cases prior to October 25, 2001 and those from October 3, 2006 onwards.

In order to comply with the fiscal rules of inheritance law, heirs need in the first instance to file a statement of succession with the Italian tax authorities.

Who is liable for Italian estate tax?

If the deceased was resident in Italy at the time of death, Italian Inheritance Tax applies to the deceased’s worldwide assets. However, if the deceased lived outside Italy, Italian estate tax is only payable on assets located in Italy.

Of course, in order to prevent issues with double taxation, Italy has a number of cross border taxation arrangements in place, including with the UK and the USA.

Unity of inheritance

Italian inheritance law is based on the principle of ‘unity of inheritance’. To clarify this, the law of the country of last domicile deals with any movable assets. Movable assets could, for instance be furniture, cars, jewellery, works of art, bank and post office current accounts, money, investments such as shares, bonds, trust and managed funds.

On the other hand, immovable assets are dealt with according to the law of the country wherever they are located. Examples of immovable assets include houses, shops, buildings, agricultural or building land.

How does Italian estate tax work?

While Italian estate tax appears less onerous, in terms of payments, compared to some other EU Member States, it is nevertheless complex.

In effect, Italian estate tax applies to the net value of the deceased’s estate. This therefore, includes not only movable but also immovable assets.

In addition, equity in non-family businesses and shareholdings in companies are taxable. However, there are exceptions to this.

Indeed, because the range of taxable assets is so broad, it is important to review the balance of ownership of your assets in the above mentioned categories. Above all, if you have children or you stand to inherit assets from an Italian estate.

It may moreover, also be worthwhile considering property ownership changes to protect your assets. In addition, some careful estate planning for the transfer of assets within the family is crucial.

Italian estate Tax on property

As far as a property is concerned, it is important to bear in mind the income value of Italian real estate property. This is calculated on the capitalised cadastral annuity.

In order to ascertain the cadastral value of a property, re-evaluation coefficients are as follows.

– Agricultural land: €112,50

– Buildings – Cat. C/1 and E: € 42,84

– Buildings – Cat. A/10 and D: €63,00

– Buildings – Cat. B: €147,00

– Other buildings: €126,00

– Habitable buildings, primary residences and relative appurtenances: €115,50

Depending on the relationship to the deceased and the category of assets, tax is applied proportionally to individual heirs or legatees.

The table below summarises quotas and exemptions from inheritance tax relating to Italian real estate property:

BENEFICIARY INHERITANCE TAX ASSET CATEGORY REGISTRATION TAX CADASTRAL TAX
Spouse and/or Children Value of assets & rights: 4%

Below €1 million value, tax-exempt.

  • Primary Residence
  • Other property
  • Other assets
€200

2%

€ 168

1%

Siblings Value of assets & rights: 6%

Below €1 million value, tax-exempt.

  • Primary Residence
  • Other property
  • Other assets
€200

2%

€ 168

1%

4th Degree Relative Value of assets & rights: 6%
  • Primary Residence
  • Other property
  • Other assets
€200

2%

€ 168

1%

Other Value of assets & rights: 8%

 

  • Primary Residence
  • Other property
  • Other assets
€200

2%

€ 168

1%

Additionally, in accordance with the Italian Disabilities Act, the threshold from which disabled beneficiaries are liable for inheritance tax is €1.5 million.

Furthermore, quotas mentioned in the table above also apply to lifetime use (usufruct) of a property title deed.

What is excluded from Italian inheritance tax?

As previously mentioned, according to Italian inheritance tax law, certain categories of assets are exempt from Italian inheritance tax. These include government bonds and unit linked whole of life insurance policies. Additionally, shareholdings in family businesses and certain charitable donations are exempt.

EU regulations

Choice of law

In addition to Italian inheritance law, it is also worth mentioning EU succession regulations introduced in 2015.  In brief, these regulations provide testators with an opportunity to amend the Italian principle of unity of inheritance.

As a result of EU succession regulations, non-Italians who are resident in Italy can make a choice of law in their will. In other words, a testator can stipulate that they want the law of their own country, or nationality, to govern their Italian-based assets.

Furthermore, EU regulations do not restrict the choice of law to EU nationals resident in Italy. For example, a US national could nominate US law to apply to the succession of their property in Italy.

It should however be mentioned, that nominating a country law needs careful consideration. Given that a testator needs to take in to account matters such as foreign matrimonial regimes, usufruct, tax consequences, joint ownership structures and other foreign proprietary rights with respect to an estate, it would be wise to seek advice before acting.

European Certificate of Succession

In order to facilitate cross border successions, an additional benefit of the EU succession regulations is the European Certificate of Succession. While this document is issued by the relevant authority dealing with the succession, heirs, legatees, executors and administrators of an estate can use it to prove their status and thereby exercise their rights or powers in other EU Member States.

Finally …

As can be seen, Italian inheritance is a complex matter. While there are actions that you can take to mitigate the impact of Italian inheritance tax law on estates, because each case is different, you should seek professional support and advice.

At De Tullio Law Firm, we have over 55 years of expertise managing cross border 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.

Please contact us if you have any estate tax questions or if would like to discuss your situation.

You may also be interested in Inheritance Law and Taxes

Italian Inheritance Law Services

Italian Inheritance law: De Tullio Law Firm's servicesItalian Succession 

For over 55 years, De Tullio Law Firm​ has been providing clients worldwide with clear-sighted Italian inheritance law services.

Roman law

As Italian succession law is based on the principles of Roman Law, it provides some protection to close members of the family. This therefore partially limits the right of the testator to dispose of his/her own assets.

Testamentary Succession is defined as the assignment of 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 is devolved following the principles of Legal Succession. In other words, where there is no will, succession law gives rights to a number of legitimate heirs. This means that certain heirs have the legal right to inherit a portion of the deceased’s estate.

Known as legitimate, reserved or forced heirs, these beneficiaries are the spouse or registered partner of the deceased. Thereafter, beneficiaries include relatives identified by law as those closest to the deceased. For instance, children, parents and relatives up to the 6th degree of connection.

Italian succession law reserves a significant quota of inheritance for these beneficiaries. Because they are defined as forced heirs, it means that a testator cannot exclude them from inheriting, even with a Will.

However, when drafting an Italian will, the testator is free to dispose of a part of his assets known as the, “disposable quota”. This allows the testator to assign part of their assets to non‐relatives or organisations such as charities.

Our Italian inheritance law services

– Italian inheritance rights assessment

– Drafting Italian Wills

– Claiming / recovering inherited Italian property

– Italian property, titles, records searches

– Legal support for the sale of inherited Italian properties

– Obtaining appraisal and or a survey of inherited Italian property

– Determining Italian inheritance tax

– Obtaining copies of public Wills

– Challenging Wills drafted in conflict with the Italian legislation

– Managing Italian probate

– Registering inherited property in the name of heirs

– Obtaining release of inherited funds deposited in Italian banks

Read more about our Inheritance Services.

Finally …

If the deceased was resident in Italy at the time of death, Italian Inheritance Tax applies to the deceased’s worldwide assets. However, if the deceased lived outside Italy, Italian estate tax is only payable on assets located in Italy.

If you own assets in Italy, we recommend that you draft an Italian Will. And, if you need help with Italian estate planning, we can support you.

At De Tullio Law Firm, we have over 55 years of expertise with managing cross border succession and estate planning matters throughout Italy. We offer a full range of Italian inheritance law services. In addition, our firm is also a full member of STEP, the world’s leading association for trust and estate practitioners.

For additional information about Italian succession and inheritance, you may find our Italian Succession Guide useful.

If we can be of assistance, please get in touch at: info@detulliolawfirm.com

 

You may also be interested in our inheritance videos.

 

How Can An Italian inheritance Solicitor Help You?

Italian inheritance is complex. Get the right advice

If you are the beneficiary of assets in Italy, and you have decided to accept your Italian inheritance, it is a good idea to use a specialist Italian Inheritance solicitor to support you through the probate process. The Italian inheritance process can be complex so, obtaining the right legal advice and having the right lawyer on your side will be massively beneficial in terms of time and expense. Even more so, if you are not resident in Italy.

Why engage the services of an Italian inheritance lawyer?

Italian inheritance solicitor

A specialist Italian Inheritance lawyer will act on your behalf – and in your interests to protect your inheritance. This means that you can be certain of having a calm, rational, professional and trustworthy presence in Italy. You will also receive sound advice for all the issues that arise in your case throughout the inheritance process.

The Italian probate procedure is not always straightforward. It can be frustrating and time-consuming. A specialist Italian Inheritance lawyer will be able to guide you through all the legal and tax issues.

You may need to prove legal entitlement to your Italian inheritance. Your solicitor will be able to help you gather all the necessary paperwork to evidence your rights.

Although most inheritance cases go uncontested, some cases do end up in court. Where claims arise, it is wise to settle out of court. This helps to reduce the cost. However, if your case does end up in court, having an attorney on your side can be enormously advantageous. In fact, having your own attorney will help ensure that all of your documents are in order, strengthen your legal position and add knowledge to your case.

Finally …

Because the loss of a loved one makes families feel fragile and emotionally vulnerable, dealing with inheritance issues on top of loss can feel very stressful. Having a solicitor with legal expertise in Italian inheritance matters will help relieve some of that strain.

We have produced a comprehensive Guide to Italian Inheritance. It contains legal advice about the Italian Inheritance process, which we hope you will find useful.

If you would like to consult an Italian inheritance lawyer about your case, please contact us.

You may also be interested in How to write a Will

Emphyteusis – What You Should Know

Introduction

A recent topic of discussion is that of Emphyteusis, a regime which has its roots in Roman Law. It formed part of the feudal system and is connected with the agricultural economy. Farmers were offered the possibility to cultivate land thereby sustaining themselves. In return, farmers paid an annual ground rent or canon in money and or in kind. Read more

What Is The Role of an Executor in Italy?

Only a testator may appoint an executor in a Will 

What Is The Role of an Executor in Italy? If you appoint an executor in your Will, your executor ensures that your last wishes and the administration of your estate are taken care of after your death.

In order to do this, unless you have stipulated otherwise in your Will, your appointed executor undertakes to manage your estate with all reasonable care.

In Italy this  includes managing all probate and succession procedures in accordance with Italian legislation. The executor takes possession of all the assets included in your estate and manages the distribution of assets and bequests to heirs in accordance with your Will. Where an executor has been appointed, your heirs may neither manage nor dispose of your assets autonomously.

Appointing an executor is highly recommended in complex personal or patrimonial frameworks: if your estate involves cross-border assets, where an heir is legally deemed incapacitated, if an heir is under the age of 18, if your estate is to be transferred to heirs who live outside of Italy and or heirs are not Italian nationals or heirs who the testator feels may have vested or conflicts of interest.

According to Italian law, the powers of an executor include:

  • managing the deceased’s estate, taking possession of the assets included in it and returning to heirs those assets which do not need administration (personal belongings for example);
  • distributing estate assets among heirs (forced and nominated heirs as applicable);
  • actively and passively representing the inheritance in court should issues arise during administration;
  • obtaining relevant legal consents where heirs are minors, absent, legally incapacitated or legal entities.

Once the Italian succession procedure has been completed, the executor must render accounts and is personally liable to pay damages to heirs or legatees in case of malpractice.

Is it possible to take a “DIY” approach to Italian estate administration?

Of course an executor can manage the whole Italian succession procedure themselves. That said, the death of a relative or friend is a very stressful and emotional time and if there is any complexity such as real estate property in Italy, an executor may find it extremely helpful to have a competent and experienced professional on board to manage Italian succession procedures. Engaging a specialist Italian inheritance lawyer will facilitate the whole process, save money and headaches with paperwork and red tape and avoid procedural issues (mistakes, wrong documents, omissions etc.).

Finally …

If you are making or reviewing your Will, appointing an experienced estate lawyer in Italy as your executor protects heirs from costs deriving from procedural mistakes and inheritance tax calculations. Likewise if you have been appointed an executor for an Italian estate: a lawyer will be able to help with the administration of a Will. If a costly error does arise, your lawyer is jointly liable. Contact us if you would like to discuss your case.

Cross-Border Inheritance – A Case Study

What is the legal situation if you own assets in Italy and abroad?

Cross-Border Inheritance – A Case StudyTom Smith was a UK national in his 60s. He had two children from his first marriage, both children are now adults. On a trip to Italy 20 years ago, Tom met a young Italian woman, Giovanna. A few years later, they got married in Giovanna’s home town – Perugia, in Umbria.

Tom and Giovanna set up home in the countryside, about 30kms from Perugia. They lived in a house on two hectares of land set to orchards and olive groves. Tom was passionate about looking after his land.

Tom and Giovanna have a daughter. Francesca, now aged 15, was born in Italy and holds dual British and Italian nationality.

Before he met and married Giovanna, Tom had purchased a property in Bath in southwest England. The title is in Tom’s name and the property is currently valued at about £1 million. During their marriage, Tom and Giovanna purchased a property in Cornwall, now worth about £300 thousand, which they own as tenants in common.

The property in the Umbrian countryside was purchased for €250 thousand in 2007, under the Italian marital “Community of Property” regime, and prices have remained stable since then.

In his name only, Tom also has a portfolio of investments in the UK. The portfolio is worth about £200 thousand. In addition, Tom has UK bank accounts with a balance of £10 thousand. He and Giovanna have a joint bank account in Italy with a balance of €12 thousand, mainly used for property maintenance, tax and living expenses in Italy.

When Francesca was born in 2002, Tom made a new English Will. He revoked his former Will at that time. He left legacies of £100 thousand to each of his two adult children, with the residue of the estate to be held in trust with an income to his wife Giovanna for life and, on her death, to Francesca. He appointed his English solicitor, David Johnson of Bath, as executor and trustee of the estate.

Tragically, one morning last year, while Tom was working in his olive grove, he suffered a  fatal heart attack. Giovanna was devastated. She is now finding it impossible to cope with the house and land in the Italian countryside. She wants to sell the property and purchase an apartment for herself and Francesca in Perugia. Giovanna’s parents live in the city and there is a better selection of schools for Francesca when she starts high school next year.

Understandably, Giovanna cannot face dealing with the English legal system’s grants of probate, trusts and so on. David Johnson is administering the entire estate as executor and trustee.

David is not very familiar with Italian law and the Italian inheritance and probate procedure and has contacted us with a number questions regarding the Italian property involved in the succession.

Cross-border inheritance Q&A

  1. Is Tom Smith’s English Will recognised under Italian law? If so, do the Italian authorities require a UK grant of probate before commencing the administration of the Italian estate?
    Assuming Tom Smith’s Will is recognised as valid by the competent authorities in the UK, it is also recognised under Italian law. A UK grant of probate evidences the recognition of the Will by the UK authorities and is necessary to start succession procedures in Italy.
  2. Is it possible Tom Smith also left an Italian Will? What searches could be made to ascertain this?
    There are various types of Will in Italy. If Tom Smith had a Formal or Holographic Will, which was deposited with a Public Notary, then a search can be conducted through:
    a) Lodging a request with the competent notarial archives;
    b) Lodging a request with the General Wills Registry in Rome.
  3. What steps, if any, should be taken immediately in Italy? Who is empowered to take such steps?

Any individual having an interest in the succession should start the relevant succession procedures in Italy, ideally with the support of a professional. The priority is lodging the statement of succession with the Italian Inland Revenue (Agenzia delle Entrate).

  1. Can I liaise directly with the bank in Italy, requiring funds to be transferred directly to Tom’s client account so that Giovanna and Francesca have funds to live on?
    Yes. However, no funds will be released by the Bank prior to completion of succession procedures in Italy.
  2. As the executor of Tom Smith’s Will, can I sell the Italian property directly to a third party? Which law governs the administration of the Italian property?
    An executor should dispose of the inheritance assets in compliance with the Will. In principle, the administration of an Italian property is regulated under Italian law.
  3. Under Italian conflicts rules, which law governs the succession of the Italian property?
    Italy is a signatory to the EU Succession Regulation. Art. 22 of the EU Succession Regulation provides that a testator may choose, or determine, the law of their nationality as the law to govern the succession as a whole, professio juris (choice of law).
    Alternatively, with regard to real estate property, succession will be regulated under Italian law. As far as movable assets are concerned, succession will be regulated by the law of domicile.
  4. Are there any forced heirship rules in Italy? Will they be applicable in this particular case?

Forced heirship exists in Italy. It is applicable in this case both to Tom Smith’s direct descendent – his daughter, Francesca and to Giovanna his surviving spouse.

  1. If the Italian property cannot be sold, could the trustee and/or Francesca be one of the registered owners of the property?

They can, provided they are named as heirs in the Will.

  1. Would it have been easier for Tom Smith to make a Will under Italian law to dispose of his assets?
    Certainly the whole succession procedure would have been easier and more practical if Tom Smith had written a Will in Italian. As a matter fact, there are difficulties in managing a foreign Will in Italy. A Will written in a foreign language requires a certified translation by a sworn translator. This can lead to issues regarding interpretation of the testator’s wishes by the competent Italian authorities once the Will is published. This in turn may lead to a costly and protracted succession procedure.
  2. Is there any inheritance tax in Italy and, if so, who is liable for the payments?
    Italian inheritance tax should be paid by the heirs when lodging the statement of succession.

Finally …

If you have any questions concerning your own cross-border property and succession case or circumstances, please consult our comprehensive Italian Inheritance Guide or if you would like to discuss your personal situation, please get in touch.

At De Tullio Law Firm, we have over 55 years of experience managing cross-border inheritance cases on behalf of Italian and international clients. We have in-depth expertise of Italian and international legal systems and processes. We understand the way things work in Italy, which is often different to the way things work elsewhere.