Brazil has forced heirship rules which restricts the distribution of local assets. Consequently, succession planning becomes increasingly more complex but also extremely important.
As most of our clients also have assets invested outside of Brazil, a global succession planning is an essential tool to balance the distribution according to clients’ wishes. Understanding and knowing our clients’ wishes and their family structure, together with an analysis of their global wealth, are the first steps for efficient planning. During a crisis, especially a health-related one, making sure that families have their succession planning formalized and recorded is one less thing they have to worry about.
It is also very important to understand how succession works in every jurisdiction where their assets are located, including analyzing possible tools (wills, trusts, etc.), tax impacts. and how the probate process works. For this component, selecting the right service providers (local legal and tax advisors) is fundamental. As a Family Office, we have an advantage in working with different jurisdictions and providers, where our knowledge and expertise makes the next succession planning more efficient and robust.
Succession planning may include not only future asset distribution, but also present actions, such as, gifts and asset reorganizations focusing on the lowering tax impacts as much as possible.
Another important consideration is how mental incapacity conditions will be treated in each case.
The result will be a set of actions and documents reflecting not only the client’s desired asset distribution but also how the family will be taken care of with his/her passing.
For our Brazilian clients, when possible, we usually recommend that offshore planning also considers the Brazilian inheritance laws to avoid unwanted disagreements among the heirs.
And, last but not least, succession planning is not a one-time project and must be reviewed from time to time.