What are the principles of Italian inheritance law?
Law n.218, 31st of May 1995 regulates the field of Italian inheritance law in the framework of international private law.
The national law of the deceased party at the time of death determines succession rules.
The Italian legislator adopted the principle of “unity of inheritance”. This principle differs substantially from the one adopted in other countries. Notably common law countries. Unity of inheritance makes a distinction between between movable and immovable assets.
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.
The law of the last domicile or last citizenship of the deceased party is applicable to movable assets.
The national law of the location of immovable assets is applicable. This is the so called, “lex rei sitae” (law of the country where the property is located). One of the most important consequences is that, if the deceased’s estate includes properties located in different states, the succession of each property is subject to the law of the country where the property is located.
The inheritance law that regulates succession is the national law of the deceased at the time of death
Italian conflict of laws considers the possibility that the national law of a deceased foreign national might defer to the law of another country. Such deferment is however, only effective if the law of the third State accepts the deferment. For example, if an English citizen owned a property in Italy, succession will be regulated by the law of England and Wales. However, according to the conflict laws of England and Wales, the law applicable to overseas property is“lex rei sitae”. In other words, Italian inheritance law is applicable to the Italian property.
The testator has the right to submit his succession to the law of the country where he resides. Such choice has to be formally expressed in a will and shall not be prejudicial to the rights that the Italian law provides for, “legittimari” or forced heirs. These are close members of the family who have the right to receive a fixed part of the estate. Whether the deceased had a will or died intestate, legally, the deceased’s spouse or registered partner and children for example must receive a portion of the estate.
If you own property in Italy, it is advisable to make an Italian will
It is highly advisable to make an Italian will in order to limit the consequences of “testamentary succession”. This also applies where the deceased has not left a will, in such case the Italian law determines which relatives of the deceased have a right to succeed (primarily the spouse, the legitimate and natural children, and the ascendants).
Where there are no heirs, Italian inheritance law assigns Italian assets to the Italian State.
EU Regulation 650/2012 simplifies cross-border inheritance matters
Also known as Brussels IV, EU Regulation 650/2012 came in to effect on 17th August, 2015. The regulation harmonises succession rules in participating EU States, which is all of them except Ireland and Denmark. In an effort to simplify cross-border succession, the EU adopted a single, unified connecting factor – habitual residence.
Brussels IV provides an opportunity to elect a country law to apply to your succession
Brussels IV allows individuals to make an election for the country of their nationality to apply to the devolution of their entire estate. Or, where individuals have multiple nationalities, a testator may choose to apply one of these nationalities.
Testators do however need to take action. If you own a property in Italy, you can nominate a country law in your will. This is known as a Choice of Law codicil.
If you are in the process of making or reviewing your will, it is therefore worth considering including a properly drafted Choice of Law codicil to apply to cross-border inheritance. You need to carefully consider matters such as foreign matrimonial regimes, usufruct, tax consequences, joint ownership structures and other foreign proprietary rights with respect to your estate.
Another benefit of Brussels IV is the European Certificate of Succession (ECS). This allows heirs, legatees, executors of wills and administrators of the estate to prove their status. The certificate is then valid in all other EU Member States.
Brussels IV also provides potential benefits for non-EU nationals
Interestingly, there are also potential benefits for non-EU nationals resident in an EU Member State. Again, you need to make an appropriate Choice of Law in your will. For example, US nationals could nominate US law to apply to the succession of their property in Italy. An Australian with property in Spain could nominate Australian law. A Canadian citizen with property in France could elect Canadian law, and so on.
Cross-border inheritance law is a complex matter. We recommend you seek independent legal advice regarding your personal situation.
At De Tullio Law Firm, we have over 55 years of experience 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. If we can be of assistance, please get in touch.