Fra Noi Embrace Your Inner Italian
Many Italian Americans spend years restoring a family home in Italy, purchasing an apartment for retirement or holding on to property inherited from parents or grandparents. Far fewer stop to consider what will happen to that property when it passes to the next generation.
While considerable attention is usually devoted to purchasing or maintaining property in Italy, less thought is often given to what may happen to that property in the future. Depending on the circumstances, the absence of coordinated estate planning may create additional formalities, delays or uncertainty for heirs.
A U.S. will is not necessarily ineffective in Italy. In principle, a foreign will may be recognized and used in connection with Italian assets, provided that the relevant requirements are met. In practice, however, relying exclusively on a foreign will may involve additional steps, including obtaining certified copies, apostilles, sworn translations and, in some cases, legal opinions or further documentation requested by Italian authorities, banks or professionals involved in the succession.
For this reason, a separate Italian will, carefully coordinated with the U.S. estate plan and limited where appropriate to assets located in Italy, may sometimes make the administration of the Italian estate more straightforward.
It is essential, however, that the two wills be drafted consistently. A later will can unintentionally revoke an earlier one if the documents are not properly coordinated. Preparing a second will should therefore never be approached as a simple formality or as a document entirely separate from the estate planning already completed in the United States.
Another relevant issue is that Italian succession law may differ significantly from the rules with which American families are familiar.
In the United States, the extent to which a person may freely dispose of assets generally depends on the law of the relevant state. Italian law, by contrast, protects certain close family members through mandatory heirship rules. A spouse, children and, in some circumstances, parents may be entitled to a reserved portion of the estate.
Whether those rules will apply in a particular international succession depends on several factors, including the deceased’s habitual residence, citizenship, any valid choice of law and the nature of the assets involved. The mere fact that property is located in Italy does not necessarily mean that Italian succession law will govern every aspect of the estate.
Under the European Succession Regulation, which applies in most European Union countries, the law of the deceased’s habitual residence will generally govern the succession as a whole, unless a valid choice has been made in favor of the law of the deceased’s nationality. The application of these rules to U.S.-Italian families can be complex, particularly where a person has more than one nationality, resides permanently in the United States and owns assets in Italy.
A will may therefore serve not only to identify beneficiaries but also, where legally available and appropriate, to clarify which law is intended to govern the succession.
An Italian will may also offer practical advantages. It may simplify dealings with Italian banks, notaries, tax authorities and land registries, and it may reduce the need to explain or interpret a U.S. estate planning structure that has no precise equivalent under Italian law.
This may be especially relevant where the U.S. plan includes a revocable living trust. Trusts are commonly used in American estate planning, but they do not always interact easily with Italian property, succession and registration rules. The treatment of assets held in trust requires specific analysis and should not be assumed to mirror their treatment in the United States.
That said, not every Italian-American who owns property in Italy necessarily needs a separate Italian will. In some cases, an existing U.S. will may be entirely adequate. In others, a coordinated Italian will may offer significant practical benefits. Much depends on the value and type of the Italian assets, the owner’s residence and citizenship, the family structure and the content of the existing estate plan.
Tax considerations should also be reviewed separately. The law governing succession and the law governing inheritance or estate taxation are not always the same. A properly drafted will may facilitate the transfer of assets, but it does not by itself eliminate tax obligations in either Italy or the United States.
The most important point is therefore not that every owner of Italian property must sign an Italian will. Rather, Italian assets should be expressly considered as part of the owner’s overall estate planning as not everyone who owns property in Italy automatically needs a separate Italian will.
Every family’s circumstances are different. The value of the assets, family composition, residence, citizenship, and the existence of previous estate planning documents all play an important role in determining the most appropriate solution.
What is important is not to assume that a U.S. estate plan will automatically operate in Italy in exactly the same way.
As international families become increasingly common, estate planning should also become international. Taking the time to review your situation with professionals familiar with both legal systems can spare your loved ones considerable expense, delay, and uncertainty in the future.
Planning ahead may not be the most exciting aspect of owning property in Italy, but it is undoubtedly one of the most valuable gifts you can leave to your family.
Send your questions regarding Italian law to cbortolani@aliantlaw.com and I’ll be glad to answer them.
The content provided in this Q&A column is intended solely for general informational purposes and does not constitute legal advice. The information presented here is not tailored to any specific situation or transaction and should not be relied upon as a substitute for professional legal counsel. Legal issues can vary widely based on individual circumstances and jurisdictional nuances. Therefore, it is crucial to consult with a qualified legal professional regarding your specific case or concerns. Please be aware that no attorney-client relationship is established by accessing or interacting with the information provided in this column. The column’s author and publisher disclaim any liability for actions taken based on the information contained herein.
