Italy: A Matter Of Marriages And Successions

Last Updated: 1 May 2019
Article by Alessia Paoletto and Giulia Cipollini

Something is changing in Italy. Italian legislation concerning successions and marriages, which has always been resistant to reforms, could undergo major changes. In particular, there are two sectors that could be amended, namely (i) the regulation of agreements as to succession and (ii) the regulation of premarital agreements.

This would be a historical reform, given the flexibility that the introduction of the ability to enter into agreements regarding succession (the so-called patti successori) and premarital contracts would bring to planning for international individuals and couples, potentially increasing the attractiveness of Italy as a country in which to settle.

The legislation currently in force

The current Italian legislation imposes some stringent restrictions on any departure from the statutory rules on succession and marriage.

As regards succession, the Italian Civil Code prohibits agreements affecting succession. That is all agreements (other than wills) by which (a) a person disposes of his estate before his demise or (b) future heirs waive or dispose of rights which may be due in relation to a succession which has not yet taken place. If entered into, agreements that meet these characteristics would be considered null and void.

As to marriage, the Italian Civil Code prohibits the adoption of prenuptial agreements, signed by the future spouses before entering into a marriage, in view of a possible separation or divorce. Matrimonial property arrangements can only be entered into by the spouses after the marriage, and only in very specific forms as determined by the Civil Code. In very broad terms, spouses can depart from the default regime of the community of property to elect for the alternative regime of the separation of property. Some bespoke arrangements may be allowed, provided however they still meet very stringent requirements as set by the Civil Code.

These prohibitions have always represented an obstacle to free decision-making by testators or spouses, thus making Italy less attractive for foreign individuals, especially those arriving from Common Law countries where freedom of testation and pre-nups and post-nups are allowed.

What happened?

On 28 February 2018, the Italian Council of Ministers approved a package of draft laws aimed at simplifying and modernising Italian legislation. Among these, a draft law is specifically dedicated to the reform of successions and marriages.

In particular, with regard to successions, the proposals include the abolition of prohibitions on succession agreements, allowing for a person to create an agreement setting out how he disposes (by means other than a will) of his estate before his demise. In addition, it is proposed to allow future heirs to irrevocably waive rights on future inheritance or parts thereof.

In combination with these changes, it is proposed to allow future spouses to enter into premarital agreements aimed at regulating personal and financial aspects of their family life, including possible relationship crises, as well as establishing criteria for the upbringing of children.

At present, this reform is not yet in force, as it will have to be approved by the Italian Parliament.

Why should you be interested in this?

The reform of legislation relating to succession and marriage is particularly interesting not only for Italian citizens, but also for all those foreign individuals who are considering the opportunity of becoming residents of Italy.

Italy is part of both the EU Succession Regulation and of the EU Matrimonial Property Regime Regulations , which already provide flexibility in relation to both these aspects: international agreements on succession would be recognised in Italy, under certain circumstances as provided by the EU Regulation; and matrimonial property arrangements can be entered into if they abide by the EU Matrimonial Property Regulation rules, and the law applying to such agreements is provided for by the Regulation.

In this context, the Italian domestic rules offer a much needed additional tool in the planning box, broadening the choices available to international individuals and couples.

Additional benefits

As far as succession is concerned, the proposed reforms in Italy are the latest step in a broader reform of the Italian legislative system, aimed at combining flexible succession planning with reduced taxation on successions and pensions. Italy already offers an extremely advantageous tax treatment on succession in Italy, with inheritance tax rates that are lower than those in force in other European countries. In addition, Italy has recently introduced a new favourable tax regime (the so-called 'Retirees Regime') which provides for a very low tax burden on those foreign individuals who, being recipients of a foreign pension, decide to move their residence to Italy. In this context, the introduction of agreements for succession would only increase the appeal of Italy.

As far as marriages are concerned, Italy has always been a wedding destination for many foreign couples, who chose it for the artistic and natural beauty that the country has to offer. In recent years, Italy's attractiveness has continued to increase, thanks to the introduction of a particular tax regime (so-called 'Res non dom regime') which provides, among other things, special benefits for foreign high net worth couples.

This, combined with the flexible framework provided for by the EU Regulations in these areas, will certainly have the effect of strengthening the interest of foreign couples in la Bella Italia.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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