Adjusting to the challenges caused by coronavirus has been difficult for all of us. However, for those acting as the executor of the Will during this period, the obligations placed...
Inheriting an Italian estate – your rights and duties
If you inherit part or all of an estate in Italy, it’s important to understand your rights and your obligations, in accordance with Italian laws.
As a beneficiary, barring limited and rare exceptions, you have the absolute right to receive your share of the estate by transfer. It’s important to note, however, that you can refuse to accept an inheritance in Italy if, for example, the deceased left you with more debts than assets or you would inherit an immoveable property in Italy that would incur disproportionate costs. You can formally renounce your right to inherit this property, either by way of a declaration signed before a Court clerk in Italy, or before a Notary Public.
However, you cannot partially decline to inherit the deceased’s estate. This rule is applied to the worldwide estate, not just assets in Italy. For example, if the deceased left you assets in the UK, you cannot inherit those assets only whilst refusing to inherit the Italian assets.
The general rule, in accordance with the Italian Civil Code, is that you have ten years from the date of death to either accept or refuse the inheritance. Any third party with an interest in your decision (such as a creditor or another beneficiary to the Estate), can bring a claim to Court within this time frame, asking that you make a decision. If you do nothing, after ten years you are no longer entitled to those assets.
You can either accept the inheritance in written form, usually signed before a Notary (called an “express acceptance”), or your acceptance can be implied by your behaviour, for example by your taking possession of the Assets.
Once you have accepted the inheritance, you become personally liable for the debts of the deceased. This means that if there were any property taxes left unpaid, for example, the Agenzia delle Entrate can claim against you for these sums.
All beneficiaries in the estate will be personally liable, jointly and severally, for the debts of the deceased, unless they prepare a “Beneficio di Inventario”, with a Notary or a court clerk, which lists the debts and assets of the deceased. This document, which must be registered with the Italian Succession Registry, will separate the deceased’s assets and liabilities from those of the beneficiaries. It also establishes that the beneficiaries will be liable for the debts of the deceased only up to the value of the assets they have received in this Estate.
Equally, the beneficiaries will be liable for inheritance taxes due by them for the succession. If one beneficiary does not pay their share of the inheritance taxes due, the other beneficiaries must pay this share, and the Agenzia delle Entrate can claim against one beneficiary only for the entire inheritance sum due, regardless of who owes what. The paying beneficiaries are, of course, entitled to claim this share back from the non-paying beneficiary.
The beneficiaries have a duty to make all the necessary checks to ascertain if the deceased left a Will. If there is a Will, the document must be presented to an Italian Notary Public for publication as soon as possible. The Notary can then advise all the beneficiaries and legatees named in the Will of their inheritance and the succession can progress without unnecessary delays.
The beneficiaries or legatees have the duty to present the Declaration of Succession (the tax document which must be lodged with the Agenzia delle Entrate) within one year of the date of death, paying all associated taxes and costs, failing which penalties will be incurred. There is no specific person who must do this or administer the estate unless the deceased named an Executor in the Will.
If you have inherited an Italian estate, or have any related questions, then please contact Jessica Zama. You may also find some more useful information about Trusts and Italian law in this podcast that Jessica has produced in conjunction with The Spectrum IFA Group.