by Alexandre Krause Pera and Victoria Zito Santos
Once associated with owners of family-run businesses, who set up legal structures for the succession of business control from generation to generation, the culture of family estate planning has recently been gaining strength in Brazil, especially in this period of so much uncertainty, heightened by the coronavirus pandemic.
Before this turbulent period, Brazilians had already been gradually bringing this kind of discussion about organizing their assets into the living room over recent decades, especially because of the advantages of heirs finding everything organized after the death of their loved ones.
However, there has been a notable recent increase in interest in and demand for legal advice on structuring estate plans, as shown by data from the Notarial College of Brazil – Federal Council (CNB/CF), according to which more than 185,000 asset transfer acts — that is, probate proceedings, wills, partitions and gifts — were carried out in the second half of 2020, 11,000 more than in the same period of 2019.
Also according to the CNB/CF survey, there was growing demand for the services described above across the states in the second half of 2020, with the following states showing high rates: Amapá (75%), Rondônia (23%), Maranhão (21%), Paraná (16%), Federal District (15%), Mato Grosso do Sul (15%), São Paulo (13%), Roraima (9%) and Mato Grosso (9%).
Based on these data, it can therefore be said that never in the last decade have so many people transferred assets in a single half-year as in the last six months of 2020.
In addition to the data mentioned, the legal world has also seen an increase in demand for legal advice related to estate planning, notably inquiries about asset holding companies — companies that aim to organize real estate and equity interests, and in some cases to reduce the tax burden; shareholders’ agreements to establish better governance in family businesses; advice on gifts and wills with clauses protecting donors and donees; setting up companies abroad; and planning with life insurance, among others.
There are several possible explanations for this change in behavior.
The first is people’s concern with organizing tomorrow, when we will no longer be here, heightened during this period by the health crisis and the genuine state of public calamity in which we live.
The second is concern about the likely increase in the rates of state taxes on transfers of assets by gift and inheritance.
Finally, the third reason may be the adoption of new forms of technology, imposed by the need for social distancing, notably the e-notariado platform, established by Provision No. 100 of the National Council of Justice (CNJ), which allows notarial acts to be carried out by videoconference, with signatures collected digitally.
Whatever the reasons for seeking legal advice on estate planning, there is no doubt that the growing maturity of discussions in this area is beneficial, since those who engage in it have effective instruments at their disposal to ensure that, in the future, their wishes regarding succession are fulfilled.
Article originally published in Fausto Macedo’s column in Estadão (in Portuguese), on 03.06.2021.
