Camila Asha Champam de Lacerda
Lawyer at Marcos Martins Advogados
The creation of a family holding company is one of the methods of succession planning and one of the most effective and economical means of anticipating inheritance and preserving the continuity of assets. A family holding company is a legal entity set up with the specific aim of managing the assets of the family nucleus, which now has a shareholding in the company.
In the context of Family and Succession Law, the family holding company is a means of perpetuating the family ‘s assets after the death of the holder of the assets that will constitute future inheritance, since it seeks to define the succession of assets before the event of death and enable the assets to be passed on more effectively and less expensively, as explained below.
This type of legal entity is also advantageous for families who, in addition to wanting to structure the transfer of their assets to heirs, have assets that generate a high level of income (e.g. rent), because, according to the tax regime chosen, there will be significant tax savings compared to the rates imposed on individuals.
Furthermore, in this legal entity, usually set up as a limited company, the future author of the inheritance will be the majority partner, transferring his assets to the new legal entity, while the other heirs, as partners, will pay in their shares in the way that best suits them.
Once the formal requirements set out in the law have been met, the majority shareholder, as the founder, transfers their shares to the other shareholders/heirs, according to their preference, and may engrave them with a lifetime usufruct clause in their favor, as well as impenetrable, incommunicable, inalienable and reversionary clauses, in order to provide them with greater security and asset protection.
In these terms, while the donor, the majority shareholder, is alive, it is as if no donation has taken place. However, on his death, ownership of the quotas and shares is automatically transferred to his heirs, and there is no need to open an inventory process; it is sufficient to register the death at the Board of Trade, with the appropriate contractual amendment.
Therefore, the family holding company, as a form of succession planning, proves to be an efficient procedure, since it aims to anticipate the necessary measures so that the succession occurs in a less traumatic and painful way for those who will need to deal with the property issues arising from the death, minimizing the risk of any discussions between heirs that could jeopardize the maintenance of the assets involved.
Furthermore, the purpose of the family holding company is also to plan the payment of taxes arising from the succession, avoiding the sale of any family assets in order to pay the taxes and procedural costs that would result from an inventory action.
In this context, it is important to opt for succession planning to protect assets when it is possible to organize them in advance, avoiding the financial and psychological strain of an unnecessary lawsuit.
Thus, from the moment the interested party opts to carry out succession planning, they should seek the support of specialized legal advice , which will carry out a survey of the estate, with an assessment of all the assets that should be transferred to the heirs, as well as the family structure and the particularities of those involved in succession planning, in order to maintain, above all, family harmony, the completeness of the assets and the legal security of the operations carried out.
Marcos Martins Advogados is aware of this issue and is prepared to provide qualified legal advice to its clients on succession planning.
