ITALIAN INHERITANCE LAW
International inheritance cases create different problems. We will show you solutions
Italian inheritance law is always applicable if the deceased had their habitual residence in Italy at the time of their death and the legal system has not declared German inheritance law applicable.
According to Italian law, an inheritance can only be made by a will or by operation of law, whereas the "Berlin Will", which is popular in Germany (mutual appointment of heirs by the spouses with regulation of the inheritance after the death of the last to die, regulated in a single document), is contrary to Italian inheritance law, with the consequence that it is invalid.
The testamentary contract is also foreign to Italian law.
ITALIAN SUCCESSION
Under Italian law, intestate succession can only take place if there is no will, or if there is a will but it does not provide for all of the deceased's property in the estate.
THE LEGAL SUCCESSION
When does intestate succession occur and when does the estate pass by operation of law?
According to the Italian law of succession, "there is no intestate succession if there is a total or partial lack of testamentary succession" (art. 457(2) of the Italian Civil Code). The absence of a will is therefore not a mandatory condition for the opening of the intestate succession. The intestate succession can also be opened if the testator has made a will, but only for the part not regulated in it. This is the case, for example, if the testator has only provided for certain legacies in his will: Subject to the provisions of the will, intestate succession applies to the remainder. Thus, intestate succession is regulated by law only to the extent that there is no will.
Who are the heirs by intestate succession?
Italian inheritance law specifies who the beneficiaries of intestate succession can be. These are the spouse, descendants, relatives in the ascending line, relatives in the direct line (siblings and cousins), other less close relatives and finally the State (Article 565 of the Italian Civil Code). In the Italian legal system, kinship is considered only up to the sixth degree.
The right to inherit by intestate succession therefore depends on the degree of relationship with the deceased and on the joint inheritance with other heirs of the same order and other heirs of a different order.
The rule for calculating the degrees of relationship, which are decisive for all questions of succession, follows the principle that in the line of descent there are as many degrees as there are generations, excluding the parent.
In the collateral line, the degrees are ordered from generation to generation by ascending from one of the relatives to the common trunk and descending from there to the other relative (always excluding the trunk).
What are the shares of the legal heirs?
Italian law provides for the following legal heirs
(a) Children of the deceased
Parents inherit their children in equal shares (articles 566 and 567 of the Civil Code). The children's shares are therefore equal. Their total share changes according to the presence of a spouse (see below).
(b) Parents of the deceased
If the deceased leaves only his parents (and no children, siblings or spouse), they inherit equal shares. If the deceased leaves no parents, siblings or spouse, but only descendants in the ascending line (grandparents, great-grandparents, etc.), the paternal descendants inherit half and the maternal descendants inherit half. However, the next descendant will disinherit the more distant descendants.
(c) Siblings of the deceased
If the testator dies without children, parents or spouse, but with siblings, they inherit equally. However, if there are half-siblings (i.e., children of the same father but of different mothers, or children of the same mother but of different fathers), they receive half the share of the full siblings.
(d) Spouse of the deceased
The spouse (even if separated but not yet divorced) always inherits jointly with the other legal heirs. The usual constellations:
-) If the deceased leaves a spouse and a child, they each inherit half.
-) If there are several children in addition to the spouse, the spouse inherits one third and the children (equally) two thirds.
-) If there are no children, but siblings or parents in addition to the spouse, the spouse inherits two-thirds and the siblings and/or parents inherit one-third (in equal shares).
-) If there are no ascendants or siblings, the spouse inherits the entire estate.
(e) Other relatives of the deceased
If the deceased leaves no children, parents, siblings, or spouse, but only relatives up to the sixth degree, they receive the entire estate in equal shares.
What happens if an heir refuses the inheritance?
If the heir refuses to accept the inheritance, his share will be distributed among the other heirs (art. 522 of the Italian Civil Code). In any case, the descendants take the place of the descendants if they are descendants or siblings of the deceased (art. 467).
The State as heir
If none of the above-mentioned heirs is present or if they have all renounced the inheritance, the State becomes the heir. The State therefore inherits in the absence of heirs up to the sixth degree and is liable for the debts inherited, within the limits of the assets of the estate.
SUCCESSION BY WILL
With testamentary succession, the heirs are determined by the testator. This means that they can distribute their assets in a way that deviates from the statutory provisions or appoint a person outside the family circle or a charitable organization as their heir.
Can anyone make a testament?
Yes, with the exception of minors or persons who are usually of unsound mind and have been declared legally incompetent by the court. A will made by an incapacitated person can be contested by anyone who has an interest in it; however, the will is valid until it is declared invalid by the court.
Who can be the beneficiary of a testamentary bequest?
All natural and legal persons born or created before the date of succession can be beneficiaries of a will. Each beneficiary must be clearly identified. Any testamentary disposition in favor of an undefined person or in favor of a person to be named by a third party is null and void.
What is meant by disposable and non-disposable shares?
The testamentary freedom of disposal is restricted if there are close family members such as the spouse and children who are legally entitled to a share of the estate; the disposable share is the part of the estate that the testator can freely dispose of after the reserve share has been satisfied.
What is the difference between an heir and a legatee?
The heir succeeds to all or part of the deceased's assets and is liable for the debts of the estate; the legatee, on the other hand, acquires certain property rights and is not liable for the debts of the estate.
How do you draw up a will?
To make a private will, it is sufficient to write down your last will and testamentary dispositions on any sheet of paper, writing them in full in your own hand, dating and signing them. To make a public will, you must go to a notary who will draw up the testator's will in the presence of two witnesses.
The will is then signed by the testator, the witnesses and the notary, stating the place and date of receipt and the time.
How can a will be revoked?
A will can always be amended or revoked by its author; it is possible to amend or revoke a private will by means of a public will, and vice versa.
Is a joint will valid?
A "joint will", i.e. a single document in which two people make a will in favor of a third party, is null and void.
Is a "reciprocal will" valid?
A "reciprocal will" is a single document by which two persons dispose of their assets symmetrically in favor of the other; it is null and void.
How is a handwritten will published?
The original of the handwritten will must be submitted to a notary together with the testator's death certificate.
In the presence of two witnesses, the notary draws up a report, the so-called "protocol on the publication of the handwritten will", in which the document is described and its contents are reproduced verbatim.
Is it compulsory to deposit a handwritten will with a notary?
No, the person who draws up a handwritten will can keep it at their own discretion without notifying anyone; or, if they fear that the will could be lost, they can deposit it with a notary.
When is a will null and void?
A will is void if it contains serious formal errors or violates the law. In the case of a handwritten will, serious formal defects may include the absence of a signature or the incomplete handwriting of the testator.
When is a will contestable?
A will can be contested if it contains formal defects, such as the absence of a date, or if the testator was legally incapacitated at the time the will was drawn up. A will contestation action consists of initiating proceedings before the competent court to have the will declared void or invalid. Anyone with an interest can lodge an appeal.
Can an executor be appointed?
The executor can only be appointed by the testator in the will.
One or more executors can be appointed, possibly also from among the heirs or legatees.
The executor must ensure that the last will and testamentary dispositions of the deceased are carried out exactly, i.e. to administer the assets of the estate, settle the liabilities of the estate, collect debts and enforce legacies.
If there are minors, absentees, prohibited persons or legal entities among the testators, the executor must have the seals affixed and draw up an inventory of the estate's assets.
Can a will be drawn up by a representative?
No, a will is a personal act and therefore cannot be made by a representative.
What happens if the will only has a few assets?
If the will only provides for some assets, intestate succession is established in addition to testamentary succession, i.e. the assets not mentioned in the will go to the legal heirs.
THE LAW ON COMPULSORY PORTIONS IN ITALY
The Italian law on compulsory portions, which must be taken into account if there is a will, is very strict.
If there is a will:
-) If there is only one child, he or she is entitled to half of the inheritance. The same applies to a spouse (without children).
-) Several children are entitled to two-thirds (in equal shares).
-) Spouse and several children are entitled to one quarter (spouse) and one half (children).
-) If, in addition to the spouse, there are only the deceased's parents, the spouse is entitled to one half and the parents to one quarter.
The siblings of the deceased are not entitled to a compulsory portion.
In contrast to German law, the right to a compulsory portion is a real claim to the inheritance and not merely a claim for compensation against the testamentary heir in the form of a pecuniary claim.
THE ITALIAN INHERITANCE TAX
Inheritances located in Italy are subject to Italian inheritance tax. The inheritance is taxed at rates between 4% and 8%, depending on the degree of relationship of the heir to the deceased, taking into account allowances.
The surviving spouse and direct descendants (children or, if they are deceased, grandchildren) have a tax-free allowance of €1,000,000 per inheritance. Any inheritance in excess of this amount is taxed at 4%.
Relatives up to the 4th degree, siblings of the deceased or relatives in the collateral line up to the 3rd degree pay 6% inheritance tax, although siblings still have an exemption (€100,000).
Other heirs are subject to an inheritance tax of 8%.
With regard to the valuation of the inheritance, inherited Italian government bonds are not valued, stocks and company shares are valued at book value, but goodwill is excluded.
The inheritance of shares in a company is tax-free for children, provided that they hold a majority interest in the company and that the company is continued for at least 5 years.
The following special rules apply to the inheritance of real estate:
The transfer of the property to the heir incurs - possibly in addition to the inheritance tax - 3% mortgage and cadastral tax, calculated on the cadastral value, which is often only one third of the market value. If the inherited property becomes the heir's primary residence, a flat tax of only €168 is levied instead.
Tax sovereignty:
If both the deceased and the heir are German nationals (i.e. have their residence or habitual abode in Germany, or if a German national has not resided abroad for more than 5 years prior to the inheritance), the entire estate is subject to German inheritance tax, including the inherited foreign assets. If neither the decedent nor the heir meets the German residency requirements, the German inheritance tax is limited to the assets located in Germany. In principle, anyone who receives something from the estate is obliged to notify the tax office of the inheritance within three months.
In addition, the inheritance of a deceased German resident located in Italy is subject to Italian taxation as described above. It is therefore possible that the Italian tax will coincide with the German tax, resulting in a higher total tax.
Inheritance planning is therefore necessary to avoid very serious financial disadvantages when cross-border assets are involved!
THE DECLARATION OF INHERITANCE IN ITALY
If the deceased left property or money worth at least EUR 100,000, the heirs and/or legatees are obliged to file a "Dichiarazione di successione" (declaration of inheritance) with the competent tax authority within 12 months of the death.
The inheritance must be declared to the competent inheritance tax authority (the authority in the deceased's last place of residence or, if this was not in Italy, the central authority in Rome) within a period of one year from the date of death. The transfer of property to heirs is only possible if the inheritance tax declaration has been made and the tax has been paid. Late filing will result in the payment of a penalty tax and a late payment surcharge of 10% of the tax due.
In the case of real estate, once the declaration of inheritance has been filed, it is necessary to carry out the transfer of the property in favor of the heirs and legatees in the correct proportions.
The filing of the Deed of Inheritance and the cadastral and land registry registration, as well as any other declarations and/or notifications, are required by law.
Failure to comply with these requirements will result in penalties and problems that will be discovered only after a long time, with significant fines and restrictions, including the inability to sell the inherited property.
They are obliged to file a declaration of inheritance:
(-) Heirs, persons appointed as heirs and legatees (unless they have expressly waived their right to do so or, not being in possession of the estate, request the appointment of an administrator before the deadline for filing the declaration of inheritance) or their legal representatives.
(-) the legal representatives of the heirs or legatees
The release of goods in the event of the absence of the deceased or a declaration of presumed death.
(-) The administrators of the estate.
(-) Trustees of the residuary estate.
(-) The executors of the will.
(-) Trustees.
If more than one person is required to make a declaration, only one declaration is sufficient.
The fee to be paid, which relates to all the assets left by the deceased, is levied jointly and severally on the heirs and only on the legatees for their share. Taxes and duties (special taxes, mortgage tax, cadastral tax, stamp duty, mortgage tax) must be paid at the time of the filing of the inheritance and cadastral transfer declarations, with the exception of the registration tax, which is paid directly to the Italian tax authorities when it is due.
THE ITALIAN CERTIFICATE OF INHERITANCE
The inheritance certificate is an official German document that certifies the status of the heir. It does not state which assets are inherited, but rather the fractional share of the estate to which each heir is entitled.
For example, it may state that the deceased's wife inherits half of the estate, while the children each receive only a quarter.
Does an Italian certificate of inheritance exist?
Unlike the German system, Italian inheritance law does not provide for a certificate of inheritance. In Italy, succession takes place automatically upon the death of the deceased and the heirs become the owners of the estate without the need for a special document such as a certificate of inheritance. However, for certain transactions, such as access to the deceased's bank accounts or the transfer of real estate, a declaration of inheritance may be required to certify the status of the heirs and the share of the estate to which they are entitled.
What if the succession is international?
In the area of international succession law, European law has taken important steps to harmonize and simplify procedures for cross-border successions within the European Union. This is particularly important in an increasingly integrated Europe, where the mobility of persons and assets is constantly increasing.
EU Regulation 650/2012, also known as the "Succession Regulation", determines which national law is applicable in the event of an international succession and ensures the recognition and enforcement of decisions in succession matters in all Member States.
One of the instruments introduced by the Regulation is the European Certificate of Succession (ESC). This document is intended to facilitate the settlement of cross-border successions within the EU and serves to prove the status of the heir or legatee and/or the powers of the administrators of the estate in a Member State other than the one in which the succession took place. It is a practical solution that avoids bureaucratic complications and possible legal conflicts between different Member States.
How do I get a certificate of inheritance in Germany?
A certificate of inheritance must be applied for at the probate court in the district where the deceased last resided. It is more convenient to apply through a notary.
What documents are required to apply for a certificate of inheritance?
A number of documents must be submitted, including an identity card, death certificate and any wills. In addition, an affidavit must be submitted stating that the information provided is true.
How do I get a European Certificate of Success in Italy?
In Italy, the notary is responsible for issuing the ESC.
The person concerned (heir, legatee, executor) must apply for the European Certificate of Succession. This application can be made directly in Italy, even if the succession has been opened in another Member State.
The application must be accompanied by all the documents necessary to prove the applicant's status and to provide information about the succession. This includes the will, the declaration of inheritance and other relevant documents.
The notary will check all the documents and, if everything is in order, will issue the European Certificate of Succession, which is valid in all EU Member States without the need for any approval procedure or similar. The European Certificate of Succession does not replace the internal succession documents of the Member States, but rather complements them in order to facilitate the handling of international succession cases.
The notary's fees for applying for and issuing the European Certificate of Succession vary according to the complexity of the succession and the value of the estate.