Inheriting bank accounts and financial assets in Italy

Why Are Bank Accounts Frozen?

Following notification of the account holder's death, Italian banks will normally suspend the ordinary operation of accounts held solely in the deceased's name.

This is not intended to create unnecessary difficulties for the family.

The restriction serves both a protective and a legal function. In addition to the bank's internal procedures, Italian inheritance-tax legislation restricts the payment of sums owed to the deceased and operations concerning inherited financial assets until the required succession documentation has been produced.

The bank cannot decide independently who is entitled to receive the funds.

That determination depends upon the law governing the succession and the documentation produced by the heirs.

What Assets May Be Affected?

The procedure is not limited to ordinary current accounts.

It may also involve:

• savings accounts;
• deposit accounts;
• investment portfolios;
• securities accounts;
• government bonds;
• mutual funds;
• shares held in custody;
• other financial instruments maintained by the bank.

Each institution will examine the assets under its control before authorising their release to the persons legally entitled to receive them.

Which Documents Are Usually Required?

Although each succession is different, Italian banks commonly require documentation demonstrating both the death of the account holder and the identity of the persons entitled to inherit.

Depending upon the circumstances, this may include:

• the death certificate;
• proof of the Italian Declaration of Succession, where required, or the documentation establishing that no obligation to file the Declaration exists;
• wills, if any exist;
• documents identifying the heirs;
• evidence of the applicable succession law where international elements are involved;
• identity documents;
• additional declarations requested by the bank.

Where documents originate abroad, certified translations and, where applicable, an apostille or legalisation may also be required before they can be accepted in Italy.

Do Foreign Heirs Need to Travel to Italy?

Not necessarily.

Many international successions are administered without every heir travelling personally to Italy.

Depending upon the circumstances, heirs may appoint a representative by means of a properly prepared Special Power of Attorney, allowing the necessary procedures to be carried out on their behalf.

As with all Powers of Attorney intended for use in Italy, the document should be prepared well in advance and comply with the formal requirements applicable in the country where it is executed.

Careful preparation frequently avoids unnecessary delays during the banking procedure.

Can Funeral Expenses Be Paid from the Frozen Account?

This is one of the questions families ask most frequently.

The answer depends upon the circumstances of the individual case and upon the internal procedures adopted by the financial institution.

Some banks may authorise payment of documented funeral expenses under specific conditions, while others may require the succession documentation to be completed before releasing any funds.

For this reason, funeral expenses should not automatically be assumed to be immediately payable from the deceased's account.

Where urgent payments are involved, the position should be discussed with the bank at an early stage.

Do All the Heirs Have to Act Together?

Not necessarily.

The substantive rights of the successors and the bank's operational requirements must be considered separately. Depending on the applicable succession law, the nature of the financial relationship and any division of the estate, the bank may require coordinated instructions or additional documentation before closing, transferring or dividing the relevant assets.

It should therefore not be assumed either that every operation always requires the joint action of all successors or that one successor may always obtain payment independently. The precise requirements must be determined in the individual case.

Where communication between heirs is difficult because they live in different countries, proper planning and coordinated legal assistance can significantly simplify the process.

What If the Deceased Owned Investments?

Investment portfolios usually require additional attention.

Besides determining who is entitled to inherit, it may also be necessary to establish how the investments should be managed while the succession is pending.

Some financial instruments may continue to produce income.

Others may fluctuate significantly in value.

Professional advice may therefore be particularly useful where the estate includes substantial investment assets or diversified financial portfolios.

Are Government Bonds Treated Differently?

Certain financial assets may be subject to specific tax rules.

For example, Italian legislation provides particular tax treatment for certain categories of government securities and equivalent financial instruments.

The applicability of these rules depends upon the nature of the investments included in the estate and should be assessed individually during the preparation of the succession documentation.

International Successions Often Require Additional Documentation

Where the deceased lived abroad or the heirs reside in different countries, banks frequently require additional documentation before releasing the assets.

This may involve:

• foreign civil status documents;
• certificates issued by foreign authorities;
• certified translations;
• apostilles or legalisations;
• evidence of the law governing the succession;
• additional declarations explaining the international aspects of the estate.

Preparing these documents at an early stage often shortens the overall administration of the succession.

Can the Funds Be Released Immediately?

As a general rule, no.

Under the current Italian inheritance-tax legislation, persons owing sums to the deceased or holding assets belonging to the deceased cannot pay or deliver them to heirs or legatees unless the legally required proof of the Declaration of Succession, an official tax assessment or a written declaration that no filing obligation exists has been provided. Specific restrictions also apply to operations by banks and financial intermediaries concerning securities transferred by reason of death.

Italian law also provides a limited exception allowing certain assets to be released before the Declaration of Succession is filed where the applicant is the sole heir, is no more than twenty-six years old and the estate includes real property, within the amount required for the cadastral, mortgage and stamp taxes connected with the succession. The practical operation of this exception is subject to the applicable implementing arrangements and should therefore be verified at the relevant date.

Outside the statutory exceptions, release depends on the required succession documentation and on any additional checks legitimately required by the financial institution. International heirs should therefore avoid making financial commitments based on an assumption of immediate access to the deceased's accounts.

Allowing sufficient time for the succession procedure is an important part of proper estate planning.

The Role of the Italian Notary

The Italian notary assists international heirs by coordinating the legal and documentary aspects of the succession relating to Italian financial assets.

Depending on the circumstances, the notary may prepare the Italian Declaration of Succession, advise on the documentation required by financial institutions, assist with Powers of Attorney for heirs residing abroad and coordinate the succession procedure with banks and foreign professionals where necessary.

For international families, this coordinated approach helps ensure that the release of bank accounts and financial assets proceeds in accordance with Italian law while reducing unnecessary delays and avoiding documentary inconsistencies between different jurisdictions.

The documentation required and the procedure to be followed always depend on the nature of the assets, the applicable succession law, the internal requirements of the financial institution and the specific circumstances of the individual estate.