Reserved Acceptance – Italian Inheritance
Debts on an Italian inheritance
Accepting an Italian inheritance also implies taking on responsibility for any debts the decedent leaves. Heirs risk having to paying any debts they inherit from their own pockets. For this reason, Italian law confers a choice of whether to renounce or accept an inheritance. There is however, also a third way to mitigate risks: reserved acceptance. To illustrate the concept of reserved acceptance, below we provide a brief case study on this matter.
Silvia and Eric Jones owned a property in Liguria and were resident in Italy for many years. Sadly, in close succession, Silvia and Eric died.
The Jones’ sons, Larry and Tom, got in touch with De Tullio Law Firm about their parents’ Italian Wills. They had concerns regarding what happens when heirs are unsure exactly what they are inheriting. Larry and Tom believed that their parents had a lot of debts. They worry they will have to pay these debts if they accept the inheritance.
Because heirs have the possibility to accept an inheritance using reserved acceptance – “beneficio d’inventario”, it means that Larry and Tom will only be liable to pay their parents’ debts on any sum they inherit.
What is reserved acceptance?
If you are an heir, but you are unsure whether the inheritance contains more liabilities than assets, you can use, “beneficio d’inventario” (reserved acceptance). This avoids any merger between your estate and the decedent’s. Thus you will not be liable to pay off the decedent’s debts with your own money.
If, for example, you inherit €10,000, compared to a debt of €20,000, you will only be liable to pay the debt on the sum you have inherited, namely the €10,000.
Reserved acceptance is however not a good idea if an heir is certain that liabilities outweigh inherited assets (unless the heir wishes to pay debts in order to honour the decedent’s memory). Where certainty of debt exists, renouncing the inheritance is a more appropriate solution.
It is worth mentioning that certain people have to accept an inheritance through “beneficio d’inventario”. These people include minors under the age of eighteen, people in care and legal entities, including the State, associations and foundations.
How does reserved acceptance work?
You need a notarial deed for reserved acceptance. Alternatively, you can make a declaration to a clerk of the court in the district where the decdent had their last domicile.
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.
If you are unsure about any aspect of an Italian inheritance, please contact us. We will be happy to provide you with more detailed information.