Accepting an inheritance with the benefit of inventory in Italy
How to protect your personal assets from debts associated with your Italian inheritance.
When a loved one dies, we understand there are many issues that those left behind need to navigate at an extremely difficult time. Having to make funeral arrangements, notify friends and family and the grieving process can be overwhelming. Unfortunately, there are also critical legal matters that need your attention. If your loved one left assets not only at home but also in Italy, estate administration is more complex, but it’s an area in which our legal team can help you. Should you wish to discuss your particular case, please get in touch.
Italian estate inheritance options available to heirs
An inheritance consists of assets (moveable and immovable property) and liabilities (debts). Italian law stipulates that an heir becomes responsible for settling any debts the decedent left. The acceptance of an inheritance, therefore, sometimes presents a risk because if the value of the assets included in the inheritance is less than liabilities on the estate, an heir would be responsible for paying debts from personal finances.
In Italy, inheritance always requires an expressed or tacit acceptance, or refusal, by an heir. Italian law provides three inheritance options:
- Unconditional acceptance of the inheritance, which means an heir inherits all the assets subject to succession and assumes personal liability for the decedent’s liabilities, even if the amount of the debts exceeds the value of the assets inherited. An heir is therefore liable in a personal capacity (with their own assets) for any portion of the decedent’s debts that cannot be paid from the inheritance.
- Refusal of the inheritance, which means an heir completely renounces the succession. In effect, it means all claims to the inheritance are forfeited: an heir that rejects an inheritance is regarded as never having been a been an heir. The statutory arrangement is that the share in the inheritance held by someone who refuses it, is therefore acquired by ‘right of representation’ by an heir’s children, and if there are no children, by other heirs.
- Acceptance under benefit of inventory (accettazione con beneficio di inventario), which is usually the best option if you are uncertain what debts and other succession charges are entailed.
What is the acceptance of inheritance under benefit of inventory?
According to Article 490 of the Italian Civil Code, acceptance under benefit of inventory is an act by which a person declares acceptance of an inheritance, but wants to protect personal assets from being combined with those of the deceased.
Usually when there is a succession, the assets of the heir and that of the deceased are merged into one, so not only does the heir inherit movable and immovable assets, but also any debts and liabilities associated with the succession.
Whoever accepts an inheritance must settle debts, so caution is advised. In order to protect the heir, the acceptance of the succession is subject to a condition, the benefit of inventory, which allows the heir to assess what assets and liabilities are entailed.
The heir is not obliged to accept the inheritance. Drawing up an inventory of debts and assets allows the heir to make an informed decision about the inheritance: either to accept and pay debts from the assets inherited, or to refuse the inheritance because debt outweighs the inherited assets.
Effects of acceptance under benefit of inventory
The first effect is that the estate of the deceased remains distinct from the estate of the heir. In essence, this means that the heir is not obliged to pay the decedent’s debts for a value greater than that of the inherited assets. Furthermore, creditors can not recoup any debts they are owed from the heir’s personal assets.
How to accept the inheritance under benefit of inventory
To accept an inheritance using the benefit of inventory, some fundamental requirements are necessary. The procedure is described in article 490 of the Italian Civil Code.
Firstly an heir has to file a declaration written in Italian, with a notary or a clerk of court in the locality where the succession was opened. After that, it is mandatory to draw up a detailed inventory of all the assets belonging to the inheritance.
Within a month of filing the above-mentioned declaration, the notary or clerk must transcribe the declaration in the related real estate registers and this transcription allows the heir to pay the creditors and the bequests.
If you are in the difficult situation of considering whether to refuse or accept an Italian inheritance, using the benefit of inventory option may be the way forward for you. Get in touch with us at email@example.com and we will be happy to help you.