Estate planning for Americans with Italian connections, whether through dual citizenship, property ownership, or relocation, requires navigating two legal systems that approach inheritance, taxation, and asset transfer in fundamentally different ways. The stakes are high: without proper planning, your estate could face conflicting legal claims, double taxation, unintended distributions, and expensive cross-border probate proceedings.
This guide covers the key intersections between US and Italian estate law. It should be read alongside our guide to Italian inheritance law, which explains forced heirship, will types, and Italian succession rules in detail.
Two Systems, Different Assumptions
The US system gives you broad freedom to distribute your assets as you wish through a will or trust. Most states have no forced heirship rules (Louisiana is the exception). Trusts are the primary vehicle for estate planning, probate avoidance, and tax efficiency. Life insurance, retirement accounts, and payable-on-death designations pass outside the will.
Italy’s system starts from forced heirship (successione necessaria): your spouse and children are entitled to mandatory shares of your estate regardless of your will. Trusts are recognized but not well integrated into Italian law. The concept of assets passing “outside the estate” through beneficiary designations is handled differently.
The conflict between these systems creates both risks and opportunities. The key planning tool is the EU Succession Regulation (Brussels IV), which allows you to choose the law of your nationality to govern your entire succession.
The Brussels IV Choice of Law
The EU Succession Regulation (No. 650/2012) determines which country’s law governs your succession. By default, it is the law of the country where you were habitually resident at death. For an American living in Italy, that means Italian law, including forced heirship, would apply to your entire worldwide estate.
However, Brussels IV allows you to make an explicit choice-of-law election for the law of any nationality you hold. As a US citizen (even with dual Italian citizenship), you can elect US law to govern your succession. Since most US states do not impose forced heirship, this effectively allows you to distribute your estate according to your wishes.
This election must be made explicitly in a valid will. It should specify which US state’s law you are choosing (since US succession law is state-based). It applies to your entire estate, including Italian real property.
Without this clause, Italian forced heirship applies by default if you die while habitually resident in Italy. This is the single most important estate planning step for Americans in Italy.
Wills: One or Two?
Cross-border estate planners generally recommend having two wills: one governed by US law covering your US assets, and one governed by Italian law covering your Italian assets. Each will should reference the other and explicitly state that it does not revoke the other.
The US will handles bank accounts, brokerage accounts, retirement accounts, US real property, business interests, and other American assets through the US probate or trust system. The Italian will handles Italian real property, Italian bank accounts, and any other Italian assets through the Italian succession process.
Both wills should contain the Brussels IV choice-of-law clause electing US law. The Italian will should be drafted by an Italian notary or attorney familiar with cross-border estates, in Italian, and in a form recognized under Italian law (the testamento pubblico before a notary is the most secure option).
Having two coordinated wills avoids the need to probate a foreign will in the other country, which is expensive, slow, and procedurally complex.
Trusts and Italy
Trusts are the cornerstone of American estate planning, but their treatment under Italian law is complicated. Italy ratified the Hague Trust Convention (1985) through Law 364/1989, which means Italian law recognizes the validity of trusts formed under foreign law. However, this recognition has limits.
Italian tax authorities treat trusts with varying degrees of skepticism. A trust that is “transparent” (where the settlor retains effective control over assets) may be disregarded for Italian tax purposes, with the assets and income attributed directly to the settlor. Irrevocable trusts with independent trustees and genuine separation of control are more likely to be respected.
The interaction between US trusts and Italian forced heirship is particularly fraught. If Italian law governs your succession (because you did not make a Brussels IV election), assets held in a revocable living trust could theoretically be subject to forced heirship claims by Italian protected heirs. The Italian courts have not fully resolved all scenarios, and the law continues to develop.
For Americans with Italian connections who use trusts: ensure your Brussels IV election is in place, consult with advisors in both jurisdictions, and do not assume that a US trust structure automatically overrides Italian succession rules.
Tax Considerations
Cross-border estates face potential taxation in both countries.
US federal estate tax applies to the worldwide assets of US citizens and domiciliaries. The current exemption (approximately USD 13.6 million per individual as of 2025, though this is scheduled to decrease significantly after 2025 under current law) means most estates are not subject to federal estate tax. However, planning for potential changes in the exemption is prudent.
Italian inheritance tax applies to Italian assets (for non-residents) or worldwide assets (for Italian residents). Rates are favorable: 4% for spouses and direct-line relatives above a EUR 1,000,000 per-heir exemption, 6% for siblings above EUR 100,000, and 6% to 8% for others with no exemption.
The US-Italy Estate Tax Treaty (1955, amended by protocol) provides mechanisms to avoid double taxation, primarily through tax credits. The treaty allocates taxing rights between the two countries based on the type and location of assets. However, the treaty predates both Brussels IV and many modern estate planning structures, creating gaps that require careful navigation.
Gift tax also differs significantly. The US imposes gift tax on the donor (with a lifetime exemption linked to the estate tax exemption). Italy imposes gift tax (imposta sulle donazioni) on the recipient, at the same rates as inheritance tax. Gifts of Italian property or from Italian residents are subject to Italian gift tax regardless of where the recipient lives.
Retirement Accounts and Life Insurance
US retirement accounts (401(k), IRA, Roth IRA) and life insurance policies with named beneficiaries pass outside the US probate process through beneficiary designations. Under US law, these designations generally override anything in your will.
Under Italian forced heirship rules, the treatment is less clear. If Italian law governs your succession, protected heirs could potentially argue that these assets should be included in the calculation of the estate for forced heirship purposes, even if the assets pass directly to named beneficiaries under US law. The Brussels IV choice-of-law election mitigates this risk by applying US law to the succession.
Review all beneficiary designations as part of your cross-border estate plan. Ensure they are consistent with your overall intentions and coordinated with both your US and Italian wills.
Italian Property Ownership Structures
How you hold Italian property affects both succession and taxation. Direct personal ownership is the simplest structure and works well for most individuals, especially with a proper will and Brussels IV election in place.
Joint ownership with a spouse (comunione dei beni under Italian matrimonial property rules, or simple co-ownership comproprieta) has specific succession implications. Community property rules differ between Italian law and various US state laws, which can create conflicts.
Corporate ownership (holding property through an Italian or foreign company) is sometimes used for tax planning but adds complexity and may trigger anti-avoidance scrutiny from Italian tax authorities.
Action Steps
If you are an American with Italian citizenship, Italian property, or plans to relocate, work with qualified professionals in both jurisdictions. Make a Brussels IV choice-of-law election in your will. Consider coordinated dual wills for US and Italian assets. Review trust structures for Italian tax and succession compatibility. Coordinate beneficiary designations with your overall plan. Understand the Italian declaration of succession (dichiarazione di successione) requirements so your heirs are prepared.
PortaleItaly helps Americans navigate the complexities of dual-country life, from citizenship recognition to long-term planning for your Italian future. Contact us to discuss your situation.