Cross-border inheritance and estate planning: Italian law and international regulations

You’ve built a life abroad in a new country, full of opportunities and amazing adventures. But what happens to your Italian villa or your savings account back home when you’re gone? In recent years, there has been a significant increase in Italians emigrating as well as in foreign citizens relocating to Italy. Therefore, when it comes to estate planning, it is important to understand the applicable law concerning Italian assets, including properties and funds, in case of death and inheritance. How does Italian law apply to the succession of a foreign resident in Italy? And how does European or international law apply to Italians residing abroad?

In this article, we will cover cross-border inheritance and how Italian law governs the succession process for both foreigners residing in Italy and Italian residents abroad. By exploring key legal principles and regulations, we aim to provide clarity on the complexities surrounding cross-border inheritance, offering insights into how individuals can navigate the intricate legal landscape when dealing with estates spanning multiple jurisdictions. Whether you are an Italian national residing abroad or a foreign citizen with assets in Italy, understanding the intricacies of Italian law in cross-border inheritance is essential for effective estate planning and asset management.

When it comes to inheritance rights, common law and civil law systems have key differences, especially concerning the rights of legitimate heirs (surviving spouse and children), who are granted specific protection only under Italian law.

Under the common law system of the United Kingdom and other Anglo-Saxon countries, testators enjoy broad discretion in determining the distribution of their assets upon death. In essence, individuals are free to leave their estates to any beneficiary of their choosing, without any mandated obligations to their heirs.

In contrast, the civil law system, as practiced in Italy and other continental European nations, takes a more structured approach to inheritance. Italian law, for instance, establishes what are known as “reserved quotas”, which allocate predetermined shares of an estate to specific categories of family members, including spouses and children. This means that, regardless of the testator’s wishes, certain family members are entitled to inherit a portion of the estate by law.

Under UK law, the act of marriage subsequent to the drafting of a will carries significant implications. Specifically, it is widely recognized that marriage automatically revokes a previously executed will, unless the will was expressly made in contemplation of the marriage. This principle reflects a legal presumption that a testator’s intentions may change upon entering into the institution of marriage, thus necessitating a reassessment of testamentary arrangements.

In contrast, Italian law takes a divergent approach to the effect of marriage on wills. In Italy, a will executed prior to marriage remains valid and effective even after the testator enters into matrimony. This distinction underscores the fundamental differences in legal philosophy between common law and civil law jurisdictions, where testamentary freedom is balanced against the protection of family interests.

Italian law traditionally dictates that the regulatory law governing transnational succession should align with the citizenship of the deceased. However, the landscape shifted with the introduction of European Regulation no. 650 of 2012, which prioritizes the “habitual residence” of the deceased. This concept refers to the country where the deceased person had been living for a substantial period and considered their primary home. Despite this shift, individuals still retain the option to designate the law of their citizenship through express testamentary disposition, if applicable.

In practical terms, this raises questions about the implications of these legal frameworks when the deceased has not left a will or specified the applicable law for succession:

• Which law would govern if properties and assets are located in both Italy and another country?
• If the law of the foreign country applies, how does it impact transactions, such as the purchase of goods within Italian territory?

The aforementioned questions have caused many issues in the recent past and they were not easily resolved until the Italian Supreme Court, with decision no. 2867/2021, stated that “if the deceased owned properties both in Italy and abroad, Italian law applies to the Italian assets, while for the residue of the foreign assets, the local foreign law would apply”.

In such cases, where the estate involves Italian properties but the deceased is a non-Italian resident or citizen, multiple cross-border legal principles may converge, necessitating a thorough evaluation of each property’s legal implications. An experienced lawyer can help you determine the applicable law, ensure your wishes are respected, and minimize potential complications for your beneficiaries. By proactively planning your estate, you can ensure your assets are distributed as intended and offer peace of mind to your loved ones during a difficult time.

The European Certificate of Succession allows heirs to prove their entitlement to assets in another EU country. It is recognized across EU states and simplifies the process of managing cross-border inheritances.

Yes, under EU rules, you can choose the law of your country of nationality to apply to your inheritance, regardless of where you last lived or where your assets are located.

Italian law may require gifts made during a person’s lifetime to be restored to the estate before it is transferred to the heirs, affecting the distribution of the inheritance.

Italian nationals living abroad should be aware of the potential inheritance tax implications on their global assets and seek advice on any applicable tax treaties.

Managing an inheritance with assets in Italy and non-EU countries can be complex due to differing laws. Do not hesitate to reach out to consult with our legal professionals who specialise in international estate planning.

Our team of estate planning solicitors are experts in Italian inheritance law will be able to guide you through the inheritance process, collecting the relevant documentation, informing you if you need any documents to be apostilled, legalised and/or translated.

Contact us today and get the legal help you need to get your estate planning in Italy taken care of. Send us an email at info@theitalianlawyer.com and book your initial FREE ASSESSMENT CALL.

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