BRAZIL Law and Practice Contributed by: Daniel Zugman and Frederico Bastos, BVZ Advogados | Bastos, Bari, Vilela e Zugman
trol and facilitating succession through lawful planning structures. The most common planning mechanisms include the following. • Family holding companies – the principal succes - sion planning vehicle in Brazil. Parents commonly contribute assets to the company and gradually transfer shares to their children while retaining usufruct or voting rights. Shareholders’ agreements are frequently used to regulate governance and restrictions on future transfers. • Lifetime gifts – gifts may be structured either at his - torical cost or fair market value under Article 23 of Law No. 9,532/1997, allowing the donor to choose between deferring capital gains tax or providing the recipient with a stepped-up tax basis. • VGBL private pension plans – death benefits are generally treated as insurance or pension pro - ceeds rather than inheritances and, in most states, remain outside the scope of ITCMD, although this treatment continues to generate litigation in some jurisdictions. • Wills – commonly used to dispose of the dispos - able portion of the estate and typically combined with lifetime gifts and family holding companies as part of an integrated succession plan. • Life insurance – under Brazilian law, life insurance proceeds are generally not subject to personal income tax or inheritance and gift tax (ITCMD). In addition, they do not form part of the deceased’s estate for probate purposes and are therefore paid directly to the designated beneficiaries. As a result, life insurance may provide beneficiaries with imme - diate liquidity while facilitating the efficient transfer of wealth outside the probate process. 2.7 Transfer of Assets: Digital Assets Brazil has no specific legislation governing digital inheritance. Accordingly, digital assets are generally subject to the ordinary rules of succession, with a dis - tinction between assets with economic value, such as cryptocurrencies and tokenised assets, and purely personal digital assets, such as email accounts, social media profiles and cloud-based personal content.
Crypto-assets and other digital assets with economic value form part of the deceased’s estate and may be transferred to heirs or beneficiaries under the general succession rules. Gratuitous transfers are generally subject to inheritance and gift tax (ITCMD), in accord - ance with the applicable state legislation. In practice, the main challenge is access and control. Although heirs may be legally entitled to inherit cryp - to-assets and other digital assets, recovery may be impossible if the deceased did not leave the relevant private keys or access credentials. Access to digital accounts maintained by service providers may also depend on the provider’s contractual policies, privacy rules and, in some cases, court orders. For this reason, estate planning increasingly includes wills, inventories of digital assets and secure arrange - ments for the storage and transmission of access credentials, particularly where assets are held in self- custody. 3. Trusts, Foundations and Similar Entities 3.1 Types of Trusts, Foundations or Similar Entities Brazil has no domestic trust equivalent. Estate plan - ning therefore typically relies on corporate and suc - cession planning tools, including family holding com - panies, lifetime gifts of shares with retained usufruct, wills, shareholders’ agreements, domestic investment funds and, for philanthropic purposes, private founda - tions and associations. Foreign trusts and foundations may also be used in cross-border planning. Although they are recognised for Brazilian tax purposes, they have no domestic civil law equivalent, and their tax, succession and reporting consequences must therefore be carefully analysed under Brazilian law. Law No. 14,754/2023 significantly changed the tax treatment of these structures by introducing specific rules for foreign trusts and offshore entities held by Brazilian tax residents, as well as periodic taxation for certain closed-end investment funds. As a result,
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