10972 Usufrutto

An interesting legal device which can be used to avoid problems relating to inheritance. The Italian law of succession is based on "legitima" ie family members have a legal right to claim inheritance of property. All well and good, unless you want to ensure that certain ppl only, and not others, get a share.
For example, I have 2 daughters in my current marriage, and 2 sons from a previous marriage. The sons are well catered for, and I wish the property we are about to purchase, to not go to them. The simple way round it is for my wife to become the sole legal owner of the house, the nuda proprieta, whilst I become the usufrutto, a non-owner but enjoying legal rights to inhabit the place until death. On my death, the usufrutto dies. On her death, the 2 daughters gain a half share each.

Now, there may well be a no. of things, what-ifs, here. For example, what if the 3 of them die and I'm the sole survivor. Who owns the property from that point?

Can anyone suggest further potential difficulties or pitfalls before I agree to and sign this usufrutto? Is it basically a straightforward solution in my circumstances?

Thanks

Category

Legal

Hi I can't help with the position in Italian Law but usufruct is a well known concept in many jurisdictions. There's a wikipedia article on it at the following:-

[url=http://en.wikipedia.org/wiki/Usufruct]Usufruct - Wikipedia, the free encyclopedia[/url]

It's always best to take proper legal advice on these things. Throwing a topic around for discussion on a forum is no substitute for proper advice.

That said I'm afraid that looking for ptfalls invariably means looking at what happen in a worst case scenario. Possible pitfalls would arise in particular if unhappy differences arose between you and your wife. If you and your spouse split up does your usufrotto prevent a sale if she as legal owner wants to sell. Or what about her mortgaging it without your consent? What is the value of your interest if you split up? Would signing this put you in a weaker position vis a vis the property that could be exploited in a break up situation.

If all of the other 3 pre-deceased you then is it the case that you'd become separately entitled to the legal ownership as closest next of kin, But then I presume that would be the intention in any event.

Also does it have any tax implications i.e. does only one of you having legal title reduce any tax credits that can be claimed.

More questions than answers I'm afraid.

The Italian law of succession appears to state that the legitimarri MUST BE RESIDENT in Italy at the moment of death of the owner. This seems to suggest that my 2 sons who live in England would have no claim to inherit any Italian property which belongs to me. Can anyone confirm this?

You can opt out of the Italian law of succession if you make a will saying you wish your succession to be dealt with under the laws of your country of citizenship. Then you have no problems, either with usufrutto which can be very complicated. If your wife dies, the two daughter do not get half each - as the surviving spouse you would also get your share - as part of the legittima - and it may be that your two sons enter into the legittima state as well - albeit in smaller shares.