ITALY Law and Practice Contributed by: Paolo Ludovici and Andrea Mirabella, Gatti, Pavesi, Bianchi, Ludovici
Although it is regulated in detail by the Italian Civil Code and is also a useful tool for mitigating, if not avoiding, inheritance disputes, drafting a Will is still not widely used. Italian entrepreneurs are often reluctant to discuss topics such as their own succession and generational transition. These topics are often addressed at a late stage or in times of crisis, when certain issues could have been avoided by planning ahead. 2.2 International Planning The internationality of assets and families requires an analysis of the civil and tax laws of the jurisdictions involved, as well as the composition of the family. Aspects to consider include: • the opportunity to benefit from double taxation treaties; • reporting requirements (CRS, FATCA, and UBO Register); and • the laws applicable to marriage, divorce and inher - itance (eg, Italy has adopted both EU Succession Regulation No 650/2012 and EU Regulation No 2016/1103 on matrimonial property regimes). 2.3 Forced Heirship Laws General Principles The rules governing succession in Italy provide that certain relatives – such as spouses and children – are considered forced heirs. Forced heirs are entitled to a portion of the estate of the deceased composed by adding together the value of what the deceased had disposed of during his/her lifetime by way of donations and the value of what was in his/her possession at the time of the opening of the succession, net of any debt. The heirs are appointed by virtue of law or by virtue of a Will, depending on whether the deceased has executed a Will before his/her death. Intestate Succession The Italian Civil Code distinguishes between different kinds of heirs on intestacy, namely:
• the surviving spouse or the surviving same-sex civil union partner; • the descendants; • the ascendants and other blood relatives of the deceased, eg, parents, grandparents, brothers and sisters; and • collateral kin from the third to the sixth degree. A surviving spouse, or a same-sex civil union partner, inherits: • the estate as a whole, when the deceased leaves no descendants, ascendants or other blood rela - tives; • one-half of the estate, when the deceased leaves one child; • one-third of estate, when the deceased leaves more than one child. The remaining two-thirds is inherited by the children in equal shares; or • two-thirds of estate, when there are no children but only ascendants or blood relatives. If the deceased leaves no surviving spouse or same- sex civil union partner, his/her children inherit his/her whole estate. In the absence of any other heir, the deceased’s estate devolves automatically on the State. Testate Succession If a deceased made a Will, the Will prevails over the rules of intestate succession. However, also in this case, the testator cannot dispose of his/her whole estate since the Italian succession law segregates part of said estate in favour of the testator’s close relatives. In particular: • When there is only the surviving spouse (or surviv - ing same-sex civil union partner): one-half of the testator’s estate is segregated (the remaining half represents the freely disposable portion). • Where there are only descendants: (a) in case of a sole descendant – one-half of the estate is segregated (the remaining half repre - sents the freely disposable portion); and (b) if there is more than one descendant – two- thirds of the estate is segregated (the remaining third represents the freely disposable portion).
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