When an account holder passes away, there is a specific probate procedure that the heirs and the bank(s) must go through to distribute the funds to the deceased’s heirs, and upon completion of the succession, to close the deceased’s bank account(s).
After the deceased’s date of death, his/her heirs (or their representatives) will need to provide the deceased’s bank(s) with a copy of the death certificate. This is a necessary step to make the Italian bank(s) aware of the death of the account(s) holder, and to start the succession procedure within the relevant branch. This can include, for example, stopping all transactions on the deceased’s account(s).
When the death certificate is handed over to the bank(s), the latter must issue a document stating the list of the deceased’s bank accounts and their balance(s) at the date of death (called the “dichiarazione di sussistenza”). This document will be used by the heirs or their representatives to prepare the inheritance tax (IHT) declaration (the “dichiarazione di successione”). The lodging of the “dichiarazione di successione” is purely for tax purposes. To avoid incurring penalties, the IHT declaration will need to be lodged with the Italian tax authority (the Agenzia delle Entrate”) within 12 months of the deceased’s date of death.
The IHT declaration is generally mandatory when the deceased’s assets include properties or lands, or when the value of the deceased’s movable assets (e.g. investments or bank accounts) are above Euro 100.000,00.
After lodging the IHT declaration with the Agenzia delle Entrate, the latter will issue a registered copy of it. This declaration contains the list of heirs, sets out the deceased’s assets and their value, and the taxes due.
At this stage, the heirs should hand the registered Dichiarazione di Successione over to the relevant Italian bank(s). To release the funds, the bank(s) may also require that the heirs provide a “dichiarazione sostitutiva di atto di notorieta’” which specifies the names of the heirs, their relationship with the deceased, whether the deceased left a Will and any relevant information which is also set out in the “dichiarazione di successione”.
At this point the bank should have all the required information and documents to release the funds to the heirs, jointly or separately.
In practice, this rarely happens. In our experience, the majority of Italian banks refuse to distribute funds to the heirs unless they all go to the relevant branch at the same time to sign the relevant paperwork. This is clearly not convenient in cases where the heirs may not get along, or in the event that they live abroad and it would therefore be inconvenient for them to travel to Italy just to sign a form.
A further point to consider is that whereas the deceased’s debts are automatically divided pro quota among the deceased’s heirs (in accordance with Art 752 of the Italian civil code), the deceased’s assets (e.g. the balance on bank accounts) fall within the communion of the estate (called the “comunione ereditaria”). As such, all the heirs hold the deceased’s assets jointly and severally.
In 2017, as a result of what the Judges considered to be “unfair” behaviour of the Bank during a succession process, the Italian Corte di Cassazione issued the following Court Order (Ordinanza sez. VI–2, Ordinanza 20/11/2017 n° 27417) :
“Each heir has the right to request that a bank releases his/her share of the deceased’s balance, or the total amount, in his/her favour, and the bank cannot reject the heir’s request (…)”
Therefore, this Ordinanza confirms that each heir can go to the relevant branch separately, and request that his/her share is distributed to him/her pro quota (or even claim the whole balance on the deceased’s account, though this does not preclude other heirs from subsequently claiming their share from the heir who acted first) without the presence and signature of the other heirs.
Should the bank reject the request, the heir can successfully obtain a Court order against this institution.
Please be aware that, in Italy, most banks act without specific parameters. There also seem to be different rules not only for each bank, but every branch. This usually results in delays and creates confusion and additional stress for individuals who, regrettably, already have to deal with the death of a dear relative in another country
Should you require legal assistance with the succession of your late relative, we would be happy to act for you and deal with the Italian institutions on your behalf.
