Short guide on international succession outside the EU
Are you a foreign citizen with inheritance interests in Italy and don’t know how to handle your succession matter? You’re in the right place. In this short guide, we will explain how international successions outside the European Union work, analyzing various aspects, including determining the applicable law and identifying the competent authority to decide in case of disputes. (We remind you that on our blog, several articles regarding inheritance succession in general are available and consultable.)
Let’s start with a brief introduction. International successions are becoming increasingly common due to the high number of transnational marriages and citizens moving for study, work, or retirement reasons.
For example, purchasing property in another country may constitute a profile of international succession.
In Italy, there is a growing incidence of this phenomenon; in fact, thousands of cases are opened every year, namely those concerning successions with foreign heirs residing abroad.
It is important for individuals involved in these cases (or who may be in the future) to understand how international successions work (applicable laws and decision-making authority).
Is a foreign will valid in Italy?
It should be noted that judgments issued in a European country, regarding international succession, are effective in other EU countries, without the need for special procedures.
That said, the will of a foreigner drafted abroad is valid in Italy (as it is in all countries adhering to the 1973 Washington Convention) under these conditions:
- written form
- drafting in the presence of two witnesses
- signing of the document by the testator
- receipt of the declaration of the testator and his signature (including those of the witnesses) by an authorized person.
In which cases is there an international succession outside the EU?
In all cases where states that are not part of the European Union are involved in the succession.
Examples: when an Italian testator leaves real estate in America as inheritance or when the same, residing in Brazil, leaves assets in that country to Italian heirs.
The prerequisites for an international succession occur when profiles of internationality arise, namely (alternatively):
- the testator, residing in Italy, holds foreign citizenship
- the testator, with Italian citizenship, resides abroad
- various locations of assets and rights forming part of the inheritance.
What are the issues with international succession?
In cases involving international succession, two types of problems must be addressed fundamentally:
- identifying the law that governs the succession
- understanding in which state the dispute must be decided.
To answer these two questions, if you are European citizens, you rely on Regulation (EU) No. 650/2012. Countries like Denmark, Ireland, and the United Kingdom, which have not adopted the Regulation, are exceptions.
The law applicable to international succession outside the EU
Regulation (EU) No. 650/2012, applicable to successions opened after August 17, 2015, was jointly adopted by European countries to ensure the highest certainty for subjects benefiting from an international succession, thereby avoiding conflicting decisions between various countries.
The Regulation provides rules applicable by the Courts called to judge and settle cross-border succession cases; in this way, the jurisdiction to hear the case together with the applicable law can be established.
Regarding the applicable law, the Regulation establishes a main criterion: the habitual residence of the deceased must be considered.
How is habitual residence determined in the case of international succession?
To determine the habitual residence of the deceased, assessments must be made on a case-by-case basis, considering, among other things, the duration, regularity, and reasons for staying in the country, the ties created there, etc…
For example: a Canadian citizen may have purchased property in Italy for more than 10 years and, even though not formally residing in Italy, may have spent the majority of their time there.
Exceptions to the criterion of the deceased’s habitual residence
However, there are cases where the criterion of habitual residence is deviated to determine the applicable law to the succession. T
his happens primarily when the deceased had a much closer connection with another country.
For example, an American citizen who established their residence in Italy at the age of 80 (after always living in America) and who dies shortly after moving to Italy. In this case, it is clear that the succession of this individual will be subject to American law, despite the last residence in Italy; this is because, having transferred only shortly before, it is presumed that they had closer ties with America rather than Italy.
Secondly, according to Article 22 of the aforementioned Regulation, it is possible to deviate from the criterion of habitual residence if the deceased has chosen a different law (through an international will or a written act). This is the “professio iuris”.
We specify that the international will is a particular form of will, regulated by the Washington Convention of October 26, 1973 (to which Italy adhered with Law No. 387 of 1990). This type of will serves to facilitate the disposal of the deceased’s assets and wishes internationally; it is an additional option to the usual forms of will that exist in every signatory country of the Convention. (In Italy, it is the fourth type of will after holographic, public, and secret wills)
However, the choice of applicable law is not entirely free. There are two options:
- the law of the State of citizenship at the time of the choice
- or the law of the State of citizenship at the time of death.
This choice must be expressed through a will or, even if implicit, must not be equivocal (i.e., it must be deducible from the testamentary clauses).
The usefulness of choosing the applicable law is immediately evident in all cases where one moves from their habitual residence to a foreign country and wants the application of the law of the home country. Similarly, the usefulness is clear in the case where an individual is about to acquire a new citizenship and prefers the law of that country.
In which State should the case relating to an international succession outside the EU be decided?
Let’s look at the cases in which the Italian judge has the power to decide on an international succession. The same judge can then apply Italian law or foreign law, depending on the particular case. Regulation No. 650 of 2012, Article 4, provides that “the jurisdiction to decide on the entire succession lies with the judicial authorities of the Member State in which the deceased had habitual residence at the time of death”.
Therefore, the law of the last residence / habitual domicile of the deceased is relevant.
For example: an Australian citizen residing in Italy for many years. Upon their death, in the event of a dispute among heirs, the competence to decide will be with the Italian Court, which will apply Italian law (unless the deceased, with their will, decided otherwise).
This is the general rule. There are then cases that may have different elements and, therefore, opposite solutions. For example: if there is an international succession Italy-America and the American citizen owns property in Italy, it could happen that both American and Italian judges decide (in relation to the real estate present in Italy).
How to manage international inheritance succession?
One of the useful tools for better managing an international succession outside the EU is the International Will (mentioned earlier). This is because it can have its effects internationally, regardless of the location of assets, nationality, domicile, and residence of the deceased.
Another instrument (valid only for EU international successions) is the European Certificate of Succession. It was introduced with a Regulation of 2012 and is a document issued by the authority responsible for the succession procedure (i.e., a Notary). It is used by heirs, legatees, testamentary executors, and administrators of estates. Its purpose is to prove the position of each heir (quality and rights) concerning a succession, that is, to allow the exercise of rights and powers provided by law in other Member States of the European Union. It is valid in all EU countries, and to request it, you only need to submit some forms containing the elements indicated in the Regulation (e.g., the personal details of the deceased, the applicant, the representative of the applicant, the purpose, etc.). As for its cost, in Italy, it is subject to a fixed registration fee (established by the Revenue Agency).
In 2021, the European Court of Justice established two important principles regarding the European Certificate of Succession:
- the authenticated copy of it has a validity of six months (from the date of issuance) and takes effect when presented to the competent authority
- it takes effect against every person named in it (even for subjects who have not requested its issuance).
Conclusions
As we have seen, in successions involving non-EU countries, there can be significant issues that are not easily resolved. It may happen that a foreign law must be applied to the succession or that the judicial case related to it is subject to foreign jurisdiction.
The advice is to seek assistance from professionals with concrete experience in the field.
If you are involved in a case of international succession and need assistance, you can contact one of our Italian attorneys specializing in inheritance successions.
