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Navigating Brazilian Probate and Inheritance rules

Brazilian succession laws and procedures can be incredibly complicated, especially if you are a foreign national living in Brazil. This guide explains they key issues that you need to understand to ensure you comply with the law

Written on 10 June 2021

The death of a loved one is always a difficult and emotional time for the family. Executors and successors often need to make decisions and there are many bureaucratic questions surrounding the Brazilian Succession Law procedure.

Brazilian Wills

The testator has the right to dispose of only half of his assets in his will. The other part is kept to the so-called mandatory legal successors. Hence, the testator needs to observe this rule when drafting a will. In the absence of this type of heir, the testator has the right to dispose of all his assets.

Most of the time the spouse or one of the deceased children will act as executor.

Types of Will in Brazil

  • Public: it is written by the Public Notary;
  • Closed: it is written by the testator and registered under a notary;
  • Private: that is to say, without any legal notation. A Will done privately may not be valid and we recommend you consult with a specialist or have it registered by a notary.

Although there are different types of wills, the most common is a public will, written by a Public Notary.

Distribution of Assets

  • In the presence of Will: its terms will be strictly followed, knowing that the rule of the “mandatory legal successors” must be applied;
  • In the absence of Will: there is a hierarchy that must be strictly followed:

In the absence of children/descendants and in the presence of a spouse and parents

This is a topic of discussion under Brazilian’s Succession Law, being complex and depending on the details of the situation. The deceased estate can be divided between the spouse and the parents of the deceased. It is important to analyse the marital property regime to determine whether the assets had been acquired before or after the marriage;

In the presence of a spouse and children/descendants

In the vast majority of cases, the inheritance is divided 50% to the children and 50% to the spouse. However, it is important to observe the marital property regime;

In the presence of children/descendants and parents of the deceased

The children will inherit the assets.

Documents necessary to the distribution of the estate

In Brazil, the following documents will be required for the distribution of the estate:

  • Death Certificate;
  • Power of Attorney granted by the concerned parts;
  • Heirs personal documents.

Inheritance Tax

The so-called ITCMD (Imposto sobre Transmissão Causa Mortis e Doação) is the Brazilian Inheritance Tax paid by the successors/executors before the estate can be distributed. It is also applied to certain donations.

There are penalties if not paid within tight deadlines. Payment is usually required within 60 days of the death.

There may be other taxes applicable, particularly if the heirs are not tax resident in Brazil. We recommend you discuss the matter with a solicitor experienced in dealing with international probate.

Process

If all the heirs are capacitated and are in agreement, an attorney/solicitor can prepare the documentation and register it via public deed.

Otherwise, the process needs to be filed  with the Family Court. It is a much longer process and it may take many years.

Receiving inheritance in Brazil from overseas 

Some Regions have attempted to charge ITCMD from persons living in Brazil who have received an inheritance overseas. Our understanding is that this charge is currently unconstitutional. This is likely to change in the future and needs to be carefully considered.

How to reduce Brazilian Inheritance Tax (ITCMD)?

It is always better to plan during the lifetime. For instance, ITCMD charges a lower rate for transfers done in life than it does for transfers causa mortis.

There are many peculiarities  in processing a probate or distribution of assets where there is an international element. It is important to consult with a solicitor/attorney experienced in dealing with international law and taxation applicable to foreigners or non-resident Brazilians.

Likewise, it is very important to have a well-written Will so that the real desires of the deceased are known and respected.

Always seek professional assistance when it comes to managing your Wills or estate planning

As with all financial matters, it is essential that you seek professional advice from experts before undertaking any element of estate planning in Brazil.

Mistakes can be incredibly costly and with regards to Wills and estate planning, the mistakes generally only get discovered when it’s too late to do anything about it.

Using our specialist introduction service we aim to make the process of creating a Brazilian Will and managing Inheritance in Brazil straightforward and transparent.

Our carefully selected partner will also provide services with professional conduct to mitigate the occurrence of legal disputes between family members.

Request free introduction to a Brazilian tax consultant

Our free introduction service will connect you with an English speaking, Brazilian tax consultant that has the required qualifications and experience to assist foreign nationals living in Brazil and Brazilian nationals living in the UK.

Once you have made your request, you will receive:

  • Overview of any fees, charges and services that you may need to get your Brazilian tax affairs in order, without any obligation to proceed.
  • Clear and professional advice that will be tailored to your personal circumstances.