BRAZIL Trends and Developments Contributed by: Daniel Zugman and Frederico Bastos, BVZ Advogados | Bastos, Bari, Vilela e Zugman
Estate and Succession Planning in Brazil: Navigating a Changing Legal and Tax Landscape 1. Introduction Brazil is undergoing one of the most significant trans - formations of its legal and tax framework in decades. While international attention has largely focused on the reform of indirect taxation, which will be phased in between 2027 and 2033, the changes affecting private wealth extend well beyond the taxation of goods and services. Over the past few years, Brazil has experienced a broader process of legislative, regulatory and judicial transformation affecting the accumulation, ownership, income generation and transfer of wealth. Alongside successive tax reforms enacted since 2023, Congress is currently debating a comprehensive revision of the Brazilian Civil Code, which may significantly affect family law, succession and wealth planning. Although the outcome of that legislative process remains uncer - tain, it illustrates the extent to which the legal frame - work governing private wealth is evolving. At the same time, Brazil has entered a new era of tax enforcement. Greater cooperation between tax authorities, the expansion of international informa - tion exchange mechanisms, technological advances in tax administration and increasingly sophisticated audit procedures have substantially increased the scrutiny applied to domestic and cross-border wealth structures. Judicial developments have also become an impor - tant source of uncertainty. The Brazilian Federal Supreme Court ( Supremo Tribunal Federal – STF) has assumed an increasingly prominent role in defining the constitutional boundaries of taxation, property rights and succession. As constitutional tax disputes frequently remain pending for several years before a final decision is reached, taxpayers and advisers are often required to make long-term planning decisions in an environment where fundamental legal questions have yet to be conclusively resolved. Against this backdrop, estate and succession plan - ning in Brazil is no longer driven solely by tax efficien - cy or succession objectives. Structures must now also be designed to withstand regulatory scrutiny, judicial
uncertainty and potential tax controversy. Litigation risk, evidentiary standards and governance consid - erations have therefore become integral elements of wealth planning rather than issues to be addressed only after a tax assessment has been issued. This article examines how recent legislative reforms, evolving tax policy and a more assertive enforcement environment are reshaping private wealth planning in Brazil. 2. Traditional wealth planning structures are being reshaped The recent legislative changes affecting Brazilian taxa - tion should not be understood as isolated reforms. Their practical significance lies in the way they have altered the economic and legal rationale underlying many of the structures traditionally used in estate and succession planning. Over the past two decades, Brazilian private wealth planning has relied on a relatively stable set of legal instruments – including family holding companies, offshore entities and lifetime wealth transfers. These structures remain widely used. However, the reasons for adopting them are evolving as legislative reforms, judicial developments and changing administrative practice reshape the balance between tax efficiency, governance and litigation risk. Rather than making existing structures obsolete, the recent reforms have required advisers to reassess the key objectives they are intended to achieve. In many cases, succession planning, governance and asset protection have become the primary drivers of the structure, while tax efficiency has become a second - ary – or at least less predictable – consideration. 2 . 1 . Real estate holding companies Family holding companies have traditionally been one of the most common estate planning vehicles in Brazil, particularly for families investing in real estate. Besides facilitating succession, governance and asset consolidation, these entities often produced signifi - cant tax savings by allowing rental income to be taxed under more favourable corporate tax regimes than those generally applicable to individuals.
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