There are common misconceptions about inheritance law and estate planning in Italy and what type of will should be made by international residents or property owners, whether a will should be made at all, or whether different wills should be drawn up in every country.
There is however no one-shoe-fits-all rule. Advice may differ, and there may be more than one potential solution. Considerations that need to be made include:
- the persons’ wishes;
- the next of kin ie spouse, children, siblings, parents
- where they are resident and/or domiciled and likely to be in the future,
- what is their nationality or do they have more than one nationality;
- where their assets are situated;
- where their heirs live;
- the availability of friends or family members to be named as Executors and administer the estate after death;
- the value of assets and likely inheritance tax liability.
The ideal estate planning solution may be straightforward and simple or could involve the creation of more than one will and complex provisions being written into a will, including dispositions into a trust, a foundation or lifetime gifts. Estate planning with international clients is therefore usually best approached in a pragmatic way. Advice on the law and possible options from the outset is a far more intricate and complex part of the estate planning consultation than the drawing up of the will itself. The central question is of course how the testator themselves would like their estate to be distributed, and from that question having obtained a detailed overall picture of the personal circumstances and assets, the advisor’s role is to enable that to happen in the most tax-effective and administratively straightforward way.
A question which has come up frequently in this firm’s work in estate planning, which we will endeavour to address in this article, is
“Should I have an English or Italian will”
The question actually encompasses to two different issues, which need to be considered separately:
- What form should my will take to ensure it is valid?
As examples of the form of the will, an English will is regulated by the Wills Act 1837 and must be written and signed by the testator in the presence of two witnesses. This is a common form in most common law based systems.
An Italian will on the other hand can be handwritten, signed and dated (“holographic will“) or can alternatively be drawn up as a formal document by a Notary who will witness the Testators signature “testamento pubblico“. A holographic will can be kept at home until after a person’s death or could also be deposited in a sealed envelope with a Notary for safekeeping “testamento segreto“.
The answer to the question on the form and validity of a will is set out clearly in Art. 27 of the EU Succession Regulation n. 650/2012 (for countries not party to the Succession Regulation the rules are found in the 1961 Hague Convention on the Conflict of Laws Relating to Testamentary Dispositions, on which Art. 27 of the Succession Regulation is based).
This Article provides a choice of the form a person’s will can take, (a will is described in the Regulation as a “disposition of property upon death”) and offers a possibility for a person to make several wills in different countries all of which may potentially take different forms:
Article 27
Formal validity of dispositions of property upon death made in writing
1. A disposition of property upon death made in writing
shall be valid as regards form if its form complies with the law:
(a) of the State in which the disposition was made…;
(b) of a State whose nationality the testator…possessed, either at the time when the disposition was made …, or at the time of death;
(c) of a State in which the testator …had his domicile, either at the time when the disposition was made or … at the time of death;
(d) of the State in which the testator …had his habitual residence, either at the time when the disposition was made … or at the time of death; or
(e) in so far as immovable property is concerned, of the State
in which that property is located.
As far as the language in which the will is written is concerned, a holographic will or public will written in English is valid, although an Italian translation will be required on publication on death if the administration of the succession takes place in Italy.
A person may also make one worldwide will which is valid (as long as valid according to Article 27 above) to dispose of all property wherever situated. This is not always practical, as in each country an application for Probate may need to be made to formally prove the will and the court or competent authority issuing a probate certificate will need an original will to be filed.
2. Which country’s succession law will govern my Last Will?
The question about whether a person should make an English or Italian will may also refer to the applicable succession law that regulates the interpretation or the substance of the will, for example:
- who is entitled to share in the estate
- whether family members have forced heirship claims (common on jurisdictions such as Italy) if they are excluded
- how an Executor is appointed
- whether a legacy is valid
- whether a previous will is revoked
- what was the capacity of the testator at the time he or she made the will
The form of the will and the applicable succession law are therefore two distinct questions. An English form will does not necessarily avoid Italian succession law being applied after death, and vice versa.
We have previously published news on this website on the entry into force of the EU Succession Regulation n. 650/2012 (this relates only to deaths occurring after 17th August 2015, even where a will has been made prior to this date) and updates on caselaw being issued by the ECJ, although so far there have been no decisions in relation to applicable law in general.
Click link: SUCCESSION REGULATION; Which national law will apply?
Although of course the United Kingdom and Ireland did not opt-in to the Succession Regulation, the provisions of that Regulation may well apply to an estate, in whole or in part, where a British or Irish national, or any other non-EU national, dies leaving assets in Italy.
Determining the applicable succession law where there is a conflict of common law and civil law jurisdictions is a complicated task, as it may not be clear where a testator will be living in the future. We have considered below two scenarios depending on the place in which the succession is opened on death, which will normally be the place of a person’s last actual residence.
Succession opens in common law jurisdiction
Many of our clients originate from common law systems which are founded on the principle that a testator has freedom of disposition, although this principle can be tempered by two factors:
Firstly, a dependant relative may be able to challenge a will and bring a claim to the courts, for example in the UK by recourse to the 1975 Inheritance (Provision for Family and Dependants Act), if the deceased was domiciled in the UK on death, but in these proceedings any decision is entirely within the discretion of the judge.
Secondly, where the deceased left assets outside the common law jurisdiction, or was actually domiciled in another country, it is possible that forced heirship rights in a civil law system could be available to certain categories of family members excluded from a will or in an intestate succession. In these situations the common law principle of “scission” may apply, and the applicable succession law will in that case be determined by whether the assets are i) movable (bank accounts, investments, shares which will be governed by the succession law of the place of domicile of the deceased) or ii) immovable (real estate property or land which will be governed by the succession law of the country where they are situated).
CASE STUDY
To give an example of the operation of the scission principle in a cross-border succession scenario: an Italian national dies resident and domiciled in the UK leaving an English will. He had left all his property by will to only two of his four children. His property consists of bank accounts in the UK and a house in Italy.
As he was domiciled in the UK, his moveable assets are governed by the law of his domicile ie English law and the two children excluded from inheritance to the bank accounts cannot make any claim (unless they can show that they were dependant on their father in which case they can bring a claim in the UK under the 1975 Inheritance (Provision for Family and Dependants Act).
His property on the other hand is situated in Italy, and by the lex sitae rule Italian succession law applies, so the two children excluded from the will could claim the value of their share in the property reserved by Italian law.
So in summary, where there are assets situated in a mix of common law jurisdictions and in Italy, it is possible that more than one succession law will be applied on death, but careful estate planning can avoid this.
Succession opens in Italy
Italian succession law is historically founded on a concept of “universality”, that at the moment of death all assets wherever situated pass to the heirs and should be governed by one law.
Where a person dies resident in Italy and the succession is considered to open in Italy, the EU Succession Regulation provides that the law of the place of habitual residence shall govern the succession. This will be the default applicable law in the absence of any will. However, a person has the right to choose in advance (the “professio iuris“) which law should be applied to the succession on death, where this is expressly stated in a will (or codicil or other validly executed document). The Succession Regulation provides that a person may make an express choice of their national law to govern their succession or if a dual national one of those nationalities, if possessed at the time of making the will or on death.
In case of dispute, the courts can consider that a will made prior to the Regulation in the form provided by a person’s national law, could possibly be considered to be an indication of an express choice of their national law.
Making a choice of law is now advisable in particular if the testator’s nationality is of English law or a nationality of another common law system. The Succession Regulation provides that the doctrine of “renvoi” does not apply when there is an express choice of law, and this can therefore prevent the operation of the scission rule, as explained earlier, and the unwanted application of forced heirship rights. A choice of law is more likely to give legal certainty to the heirs and also to the testator, that the will can be interpreted under one law and to avoid claims by future disgruntled heirs.
