7th February 2006
PRESS RELEASE
ITALY: The new succession contract or how to avoid inheritance wars
Dr Claudio Del Giudice
Rivington House
82 Great Eastern Street,
London EC2A 3JF
(United Kingdom)
Tel 0044 207 613 2788
Fax 0044 207 613 2799
A
new law has recently opened a limited escape
route through the general principle of Italian law whereby it is illegal to
enter into any contract relating to the succession of a living individual or
otherwise to dispose in any way of inheritance rights which may arise upon the
future death of a living person.
A law passed by the Italian Parliament on the 31st January 2006 now permits a
limited version of "succession contracts" (Patti di Famiglia) in Italy.
These contracts must relate to the future transfer on the death of the current
living owner to his or her issue, of a commercial enterprises or shareholdings.
There are various requirements for these contracts. As to form, these contracts
must be formalized by a notarial deed. As to the participants, these contracts must be
extended to all the beneficiaries legally entitled to share in the future succession
/ estate
(which includes all beneficiaries legally entitled to a share of the estate of
the living testator under Italian law) as to future disputes, these
must be settled by reference to arbitration rather than legal proceedings.
This legislation has very limited scope and is drafted very carefully to avoid
any interference with the compulsory minimum legal entitlement of beneficiaries
/ members of the testator's family under Italian law (Successione necessaria).
It is basically aimed at preventing the dissolution / fragmentation of
commercial enterprises / companies upon the death of the founding member /
owner.
In an country like Italy, whose economy is mainly based on small / medium
(family) firms, this new legislation could have a substantial impact, when the doubts about its
practical operation will be resolved.
Dr Claudio Del Giudice
Copyrights reserved - February 2006