By In Inheritance, Inheritance Law, Italian law, Italian Will, Law, Law Firms in Italy, Notaio, Notary

Cross-Border Inheritance – A Case Study

cross-border inheritanceTom Smith was a divorced UK national in his 60s. He had two children from his first marriage, both children are now adults.

On a trip to Italy 20 years ago, Tom met a young Italian woman, Giovanna. They fell in love and got married in Giovanna’s home town, Perugia, in Umbria.

Tom and Giovanna set up home in the countryside, about 30kms from Perugia. They lived in a house on two hectares of land set to orchards and olive groves. Tom was passionate about looking after his land.

Tom and Giovanna have a daughter. Francesca, now aged 15, was born in Italy and holds dual British and Italian nationality.

Before he met and married Giovanna, Tom had purchased a property in Bath in southwest England. The title is in Tom’s name and the property is currently valued at about £1 million. During their marriage, Tom and Giovanna purchased a property in Cornwall, now worth about £300 thousand, which they own as tenants in common.

The property in the Umbrian countryside was purchased for €250 thousand in 2007, under the Italian, “Community of Property” regime, and prices have remained stable since then.

In his name only, Tom also has a portfolio of investments in the UK. The portfolio is worth about £200 thousand. In addition, Tom has UK bank accounts with a balance of £10 thousand. He and Giovanna have a joint bank account in Italy with a balance of €12 thousand, mainly used for property maintenance, tax and living expenses in Italy.

When Francesca was born in 2002, Tom made a new English Will. He revoked his former Will at that time. He left legacies of £100 thousand to each of his two adult children, with the residue of the estate to be held in trust with an income to his wife Giovanna for life and, on her death, to Francesca. He appointed his English solicitor, David Johnson of Bath, as executor and trustee of the estate.

One morning last year, while Tom was working in his olive grove, he suffered a sudden and fatal heart attack. As you can imagine, Giovanna was distraught. She is finding it impossible to cope with the house and land in the Italian countryside. She wants to sell the property and purchase an apartment for herself and Francesca in Perugia. Giovanna’s parents live in the city and there is a better selection of schools for Francesca when she starts high school next year.

Understandably, Giovanna cannot face dealing with the English legal system’s grants of probate, trusts and so on. David Johnson is administering the entire estate as the executor and trustee.

David is not very familiar with Italian law and the Italian inheritance and probate procedure and has contacted us with a number questions regarding the Italian property involved in the succession.

Below are David’s questions and our answers:

1. Is Tom Smith’s English Will recognised under Italian law? If so, do the Italian authorities require a UK grant of probate before commencing the administration of the Italian estate?
Assuming Tom Smith’s Will is recognised as valid by the competent authorities in the UK, it is also recognised under Italian law. A UK grant of probate evidences the recognition of the Will by the UK authorities and is necessary to start succession procedures in Italy.

2. Is it possible Tom Smith also left an Italian Will? What searches could be made to ascertain this?
There are various types of Will in Italy. If Tom Smith had a Formal or Holographic Will, which was deposited with a Public Notary, then a search can be conducted through:
a) Lodging a request with the competent notarial archives;
b) Lodging a request with the General Wills Registry in Rome.

3. What steps, if any, should be taken immediately in Italy? Who is empowered to take such steps?

Any individual having an interest in the succession should start the relevant succession procedures in Italy, ideally with the support of a professional. The priority is lodging the statement of succession with the Italian Inland

Revenue (Agenzia delle Entrate).

4. Can I liaise directly with the bank in Italy, requiring funds to be transferred directly to his client account so that Giovanna and Francesca have funds to live on?

Yes David, you can. However, no funds will be released by the Bank prior to completion of succession procedures in Italy.

5. As the executor of Tom Smith’s Will, can I sell the Italian property directly to a third party? Which law governs the administration of the Italian property?
An executor should dispose of the inheritance assets in compliance with the Will. In principle, the administration of an Italian property is regulated under Italian law.

6. Under Italian conflicts rules, which law governs the succession of the Italian property?
Italy is a signatory to the EU Succession Regulation. Art. 22 of the EU Succession Regulation provides that a testator may choose, or determine, the law of their nationality as the law to govern the succession as a whole, professio juris (choice of law).
Alternatively, with regard to real estate property, succession will be regulated under Italian law. As far as movable assets are concerned, succession will be regulated by the law of the domicile.

7. Are there any forced heirship rules in Italy? Will they be applicable in this particular case?

Forced heirship exists in Italy. It is applicable in this case both to Tom Smith’s direct descendent – his daughter, Francesca and to Giovanna his surviving spouse.

8. If the Italian property cannot be sold, could the trustee and/or Francesca be one of the registered owners of the property?

They can if they are named as heirs in the Will.

9. Would it have been easier for Tom Smith to make a Will under Italian law to dispose of his assets?

Certainly the whole succession procedure would have been easier and more practical if Tom Smith had written a Will in Italian. As a matter fact, there are difficulties in managing a foreign Will in Italy, where a Will written in a foreign language requires a certified translation by a sworn translator. This can lead to issues regarding interpretation of the testator’s wishes by the competent Italian authorities once the Will is published. This in turn may lead to a costly and protracted succession procedure.

10. Is there any inheritance tax in Italy and, if so, who is liable for the payments?

Italian inheritance tax should be paid by the heirs when lodging the statement of succession.
If you have any questions concerning your own cross-border property and succession case or circumstances, please consult our handy guides and checklists or get in touch.

At De Tullio Law Firm, we have over 50 years of experience managing cross-border inheritance cases on behalf of Italian and international clients. We have in-depth expertise of Italian and international legal systems and processes. We understand the way things work in Italy, which is often different to the way things work elsewhere. Giandomenico De Tullio is a member of the ‘ordine degli Avvocati’ (Italian Bar Association) and a fully registered member of STEP (Society of Trust and Estate Practitioners), the world’s leading professional body for practitioners in the fields of trusts, estates and related issues.

Print Friendly, PDF & Email

, , , , , , , , , , , , , , ,

Comments are closed.