By David Roberto R. Soares da Silva
You need a will in Brazil.
In Brazil, talking about a will is still taboo.
There are not a few cases that I witnessed in the office when talking about a will to a client, and he or she reacts with a sign of the cross or three taps on the wood, and says: “I don’t want to talk about this because it may attract …”
Attract what? For me, not talking about “it” (the will) can only attract problems.
Maybe it is the country’s Judeo-Christian tradition; perhaps it is the joy of living inherent in our culture, the fact is that Brazilians don’t like to think that one day they will die. Plain and simple. If the client is still young, in their 30s or 40s, with children of school age, speaking of a will seems to be heresy. “Mr. Silva, I am still young and healthy, so a will is not a priority at this moment.” Isn’t it?
Let’s picture some real-life situations:
Situation 1: you split up, the relationship with your ex is not the best, and your children are still small. It is not an unusual situation. In the event of a fatality, who would you like to manage the assets to be inherited by your children until they reach legal age (in Brazil, 18 years old)? Your parents or siblings, or your / your ex?
And if you own a business, would you like your ex to run it, interfere in the business strategies, make corporate decisions, and receive all the profits and dividends on behalf of your children?
Well, without a will, it will be your ex who will manage the money, house, and other assets on behalf of your minor children … But that can be avoided with a will in which you appoint someone else to manage your children’s assets until adulthood.
Situation 2: you have four children and are married with a total separation of assets. Your children are of legal age and have their own lives. You have reduced your professional activities and now enjoy retirement with your spouse. Because of your property regime, without a will your long-life spouse will inherit a maximum of 20% of your estate. The rest will be shared between your four children because, in the regime of total separation of assets, the spouse is only an heir, just like the children.
If this is a situation that you don’t care about, fine. But if this is not the case, a well-drafted will can increase your spouse’s share in the estate from 20% to 60%.
Situation 3: you have three adult children and have always helped financially, two of whom have never stopped at jobs and had more expenses than income. Your third child has never asked you for money.
Without a will, your three kids will share your estate in equal parts. You may not think this division is fair and may want to make it up to the child who never asked for financial help. If you do not wish to donate money while living, only a will can help you leave that extra something to that child.
The same applies if you want to leave one or more specific assets to an heir, relative, spouse, avoiding fights, and lengthy disputes during a probate process.
Situation 4: your children are adults, and you live in your home with only your spouse. When one of the two dies, the house will be too big for a single person, and you want to ensure that the property generates enough income for the surviving spouse until his/her death. On the other hand, since this is the family’s most valuable asset, your children and spouse will become tenants in common in the property.
A will can be useful to assign an additional part in the estate to the surviving spouse, giving him/her the right to a more substantial portion of the proceeds if the property is ever sold. Also, the will allows you to create the usufruct over the property to your spouse (or companion). The usufruct ensures that the surviving spouse will be able to lease out the property, without the children’s consent, thus guaranteeing a monthly income.
Situation 5: you are single, widowed, or divorced, with or without children, but you live in a so-called stable union (common-law marriage) without any formalization of this relationship. Upon death, your companion must seek judicial recognition of the union to be entitled to a portion of your estate. This recognition can be complicated, as it will require the production of evidence, witnesses, and documents to prove the existence of the relationship and when it started.
If you do not want to document the relationship during your lifetime with the appropriate agreement, the will is of great use to recognize its existence and avoid hassles for your surviving companion, especially against family members who may be interested in your assets. A legal dispute over recognizing a stable union is costly, time-consuming, and full of resentment that you will undoubtedly want to avoid.
Finally, except for donations made during the lifetime, the will in Brazil is the only instrument that allows one to protect the assets to be inherited by successors with specific clauses that prevent disposition, encumbrance, or partition in case of divorce. The will can still be used for other non-patrimonial situations, like the acknowledgment of paternity, the creation of a charity, and even the emancipation of minors (older than 16 years, in Brazil).
The above situations are real cases that we deal with every day. It’s incredible how people don’t see the importance a will has for their lives, property, and successors. It is not only useful for the elderly or the wealthy; it is helpful for most people.
The will does not attract anything terrible. It is an act of love that allows you to organize your assets and ensure adequate protection for those you love most, avoiding or minimizing problems, disputes, fights, costs, and resentments.
A terrible thing is doing nothing to protect the ones you love.
David Roberto R. Soares da Silva, expert in tax, estate and succession planning, founding partner of do Battella, Lasmar & Silva Advogados, and coauthor of Planejamento Patrimonial: Família, Sucessão e Impostos. He also authored Brazil Tax Guide for Foreigners and Tributação da Economia Digital no Brasil, published by Editora B18.