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You and your Will as an Expat

By Daniel Shillito - Topics: Italy, Milan, Uncategorised, Wills
This article is published on: 5th May 2015

Changes to European law could override your Will decisions

A Will is a legal document that sets out your wishes including the distribution of your assets when you die.  Making a Will is the only way you can ensure that your assets will be distributed according to your wishes. However ‘fforced heirship’ in place in some countries (like Italy) takes precedence over your will! Descendants can take a share of your estate according to the new European laws, regardless of what your current Will states.

Who prepares my Will?

You can prepare your Will yourself or have a solicitor or other estate planning specialist prepare one for you.  Your Will is an important legal document and if strict legal requirements are not met, the Courts may deem it invalid and it may then be contested or result in your wishes not being met.

What are the new rules?

The objective of the new European regulation (Regulation No 650/2012 on jurisdiction, applicable law, recognition and enforcement of decisions etc) is to facilitate cross border successions and make it easier for European citizens to handle the legal aspects of an international will or succession. The rules are applicable to successions from 17 August 2015.

The new rules are designed to ensure that the treatment of European estates upon death (succession) is treated coherently, under a single law and by one single authority, and to avoid duplicate proceedings and or conflicting judicial decisions in different countries. The EU wants to ensure that in relation to succession matters, there is a mutual recognition of decisions amongst countries in the European Union.

One important choice available to every European resident according to the new rules, is that you can choose whether the actual law applicable to your estate should be that of your ‘habitual residence’, or that of your nationality.

At this stage the UK, Ireland and Denmark have opted out of the new regulation with the result that the parts of the Regulation which seek to simplify the complexities of cross-border successions will not apply. However for UK nationals living in Italy what all this means is that if no action is taken UK expatriates resident in Italy risk seeing their succession being subject to Italian laws rather than English laws.

As you may know the Italian law contains detailed rules about who is entitled to inherit property and it is not possible for an individual simply to decide who should benefit from his or her estate on death. In the case of citizens from European countries who have accepted the new regulation, the Italian forced heirship system will now apply after August 2015 by default, if no such election of country is made.

English law, on the whole, does not contain restrictions and people are free to decide who should inherit their estates on death. The fact that the UK has opted out means that in the absence of a will, or with a badly worded will, technical difficulties and bureaucratic hold-ups will arise, increasing the risk of disputes between beneficiaries and executors, as well as costly delays.

The new rules do not significantly impact any of the tax issues concerning the successions. However the Italian press are reporting that the Government intends to increase the rate of Italian inheritance tax and reduce the thresholds below which no tax is payable.

Something to Review

As a general rule, you should review your Will every three years or whenever there is a major change to your personal and financial situation such as getting married, separated or divorced, entering into a De Facto relationship, having a child, changing your country of residence, or if your Executor or Beneficiary dies or your financial circumstances change. Changes in law are also an important natural trigger to review your current Will instructions and the impact of the law thereon.

If you are in Italy and would like to know more, or be put in touch with a Wills or succession specialist to review your will, we can help. Please enter your details in the form below and we will respond to let you know how we can assist.

Please note that this article has been prepared to provide general information only and it does not represent legal advice. The author and The Spectrum IFA Group do not provide legal advice to clients however we work with and refer clients to qualified and licensed legal professionals, where required.

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Article by Daniel Shillito

Daniel ShillitoIf you are based in the Milan area you can contact Daniel at: daniel.shillito@spectrum-ifa.com for more information. If you are based in another area within Europe, please complete the form below and we will put a local adviser in touch with you.

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