COMPULSORY PORTION ACCORDING TO ITALIAN INHERITANCE LAW
What is the share of the person entitled to the compulsory portion in the estate according to Italian law?
Italian law protects the closest relatives (e.g. spouses) by restricting the testator's freedom of disposition in his will: In the order of succession in a will, a portion of the estate must be "reserved" for certain persons (known as "compulsory heirs"), even if this is contrary to the testator's wishes. Italian inheritance law clearly defines which shares are available and which are not, i.e. which parts of the estate the testator can freely dispose of in his will and which parts must be reserved for the beneficiary of the compulsory portion. These shares vary according to the type and number of persons entitled to a compulsory portion.
COMPULSORY HEIRS AND COMPULSORY PORTIONS
The persons entitled to the compulsory portion under Italian law are:
-) the spouse
-) the children
-) the parents (only if there are no children)
If the testator's children have already died, their descendants take over.
The heirs are legally entitled to the following shares (the so-called "compulsory portions"), to which the testator may not attach any burdens or conditions.
What is the right to a compulsory portion for each category of compulsory heirs?
-) Descendants: Half of the inheritance is reserved for the children of the deceased if the parent leaves only one child; two thirds if there are two or more children (art. 537 of the Italian Civil Code);
-) Spouse: half of the inheritance is reserved for the spouse if there is no child of the deceased. Likewise, the spouse is always entitled to the right of residence in the house used as the family home and the right to use the furniture belonging to it, if the house belonged to the deceased. These rights are payable on the disposable portion.
-) Ancestors: The parents of the deceased receive one third of the estate (art. 538 of the Italian Civil Code), if there are no spouses, children or their descendants;
-) Siblings: Italian law does not provide for a compulsory portion for the siblings of the deceased.
What is the amount of the compulsory portion if there are spouses and children?
-) If there is only one legitimate or natural child with the spouse, the share of the child is one third.
-) If there are two or more children, the reserved portion is three quarters, one quarter for the spouse and one half for the children, to be divided equally between them. The spouse is also entitled to the right of residence.
A right of residence is also granted to the surviving spouse.
EXCLUDED ITEMS
Not all items are inherited and must therefore be calculated to determine the value of the share reserved for the beneficiaries.
For example, severance payments and life insurance policies are not part of the estate and are therefore not included in the inheritance and are not inherited.
Therefore, they are not part of the estate because they occur at the time of death and are therefore post-mortem. As such, they are not part of the estate and are not subject to inheritance tax.
According to art. 2122 of the Italian Civil Code, the severance pay owed by the employer on the death of the employee must be paid to the spouse, children and, if they were living at the employee's expense, relatives up to the third degree and parents-in-law up to the second degree. The marital, family or parentage relationship with the deceased gives rise to a claim of the aforementioned persons against the employer. In the absence of a spouse, children, relatives up to the third degree and parents-in-law up to the second degree, the deceased may, in his or her will, dispose of the settlement in favour of the persons, companies, associations or foundations he or she wishes to benefit.
Similarly, the amount of the life insurance policy is not included in the estate. Pursuant to art. 1920 of the Italian Civil Code, the beneficiary acquires an independent right vis-à-vis the insurance company so that the sums paid out after the death of the insured are not included in the estate, are not subject to inheritance tax and are not taken into account in the calculation of the share of the heirs or in the calculation of any infringement of legitimate rights. The beneficiary may only be required to reimburse the injured beneficiaries the amount of the premiums paid by the deceased. The beneficiary may be designated by the policyholder when the policy is taken out, by a subsequent written declaration by the policyholder to the insurer or by a will. The policyholder may change the beneficiary at any time by means of a subsequent endorsement to the policy approved by the insurer or by will, thereby replacing the persons already named as beneficiaries with other persons or entities.