What Is Estate Planning and Why You Should Do It
Quick answer: Planejamento sucessório (succession or estate planning) means organizing, while still alive, how a person's or family's assets will be passed on to their heirs. It involves choosing among instruments such as a holding patrimonial (a family holding company set up to hold the family's assets), a gift with reserved usufruto (usufruct — the right to use an asset and collect its income while ownership passes to the heir), and a will, weighing the impact of the ITCMD (Brazil's inheritance and gift tax), and reducing the risk of conflict and delay during inventário (probate). Done ahead of time, it costs less and helps prevent disputes among heirs.
A father passes away at 78, leaving two properties, a small business, and three children who had not gotten along about money for years. There is no will, no holding company, no document at all to guide the division of assets beyond what the law requires. Probate opens, the ITCMD becomes a condition for releasing any asset, and the discord that already existed in the family finds a concrete reason to turn into a formal dispute, with a contested property appraisal and the business at a standstill until the division is settled.
This scenario repeats every week in notary offices and family courts, and much of it could have been avoided. Estate planning is exactly this: organizing the transfer of assets while still alive, so that the passing of property to heirs happens with less cost, less time, and less wear and tear than simply waiting for intestate succession (the default rules that apply when no one has planned ahead). It is not a matter only for people with great fortunes. It concerns any family with real estate, a business, or a meaningful financial reserve, and anyone who has already passed the age of 60.
This article explains what estate planning is, why the cost of the tax and the risk of conflict make organizing your affairs while still alive almost always more advantageous than waiting, what the main instruments available are (holding companies, gifts with usufruct, and wills), and how the WF Advogados POPP 65+ program structures this process.
What Estate Planning Is
Estate planning is the set of decisions and legal instruments a person puts in place during their lifetime to define how their assets will be transferred after death, or even before death, through a gift. It covers real estate, ownership stakes in companies, financial investments, and any other asset that will form part of the estate.
The alternative to planning is not the absence of succession, it is intestate succession, the set of rules the Civil Code applies when no one has decided anything in advance. The law always determines who inherits what, but it does so by a general rule, without considering the family's specific wishes, without optimizing the tax cost, and without avoiding the time probate takes. Planning means taking control of these three variables: who receives what, how much it costs, and how long it takes.
Why You Should Organize Your Succession While Still Alive
The Cost: ITCMD Doesn't Disappear If You Don't Plan
ITCMD — short for Imposto sobre Transmissão Causa Mortis e Doação, the tax on inheritance and gift transfers — applies both to inheritances and to gifts, under Article 155 of the Federal Constitution. The way it is charged is undergoing a significant change nationwide. Constitutional Amendment 132 of 2023 made the tax's progressivity mandatory, and Complementary Law 227, of January 13, 2026, completed the national regulation, with an 8% cap set by the Senate. In practice, the rate rises along with the value of the assets transferred, which penalizes more heavily those who wait and transfer everything at once through probate.
We cover this change and its impact on holding companies and large estates in detail in our article on progressive ITCMD in 2026. The key point for anyone deciding whether planning is worthwhile is this: the earlier the transfer is organized, the greater the room to use the legal instruments that move part of the transfer forward within the rules currently in force.
The Conflict: Probate Is Fertile Ground for Disputes
The second cost of not planning is not financial, it is familial. Without a will, without a holding company, and without an organized gift, the division of assets follows the rules of intestate succession, and any disagreement over asset valuation, use of jointly owned property, or ownership stake in the business turns into an argument inside the probate proceeding itself. It is common to see probate cases that begin with a property valued differently by two heirs, or a family business with no clear definition of who takes over management.
Out-of-court probate (inventário extrajudicial), carried out through a public deed under Law 11,441 of 2007, is only possible when all heirs are of legal capacity and agree on the division of assets. If even a single heir is a minor, legally incapacitated, absent, or in disagreement, the case must go through court probate (inventário judicial) instead, which is slower and more expensive. Planning succession while still alive, with clarity about who receives what, is the most direct way to keep the family on the out-of-court path.
The Instruments of Estate Planning
There is no single estate planning tool. There is a set of instruments that can be combined depending on the size of the estate, the number of heirs, whether there is a family business, and how much control the asset owner wants to retain during their lifetime. The three most commonly used in Brazil are the holding company, the gift with reserved usufruct, and the will.
Holding Company
A holding patrimonial (family holding company) is a company set up to hold the family's assets — real estate, ownership stakes in other companies, and investments — instead of keeping them in each individual's own name. The holding's shares (quotas) can then be gifted to the heirs during the owner's lifetime, with the owner retaining usufruct and management control for themselves. This concentrates governance of the estate, makes administration easier, and moves part of the transfer outside of probate ahead of time. We cover this topic in depth in our article on holding companies, including when they are actually worth setting up.
Gift with Reserved Usufruct
Making a gift during your lifetime, with reserved usufruto (usufruct — the right to use an asset and collect its proceeds while bare ownership passes to the heir), means transferring ownership of an asset to the heir while the donor keeps the right to use the asset and collect its proceeds for as long as they live. It is a straightforward instrument that does not require a corporate structure, and it moves forward a transfer that would otherwise only happen at death. It carries an important legal limit: anyone with forced heirs (descendants, ascendants, or a spouse) may only freely dispose of half of their own estate, known as the disposable portion, under Article 1,846 of the Civil Code. A gift that exceeds this limit is an inofficious gift, void as to the excess, under Article 549 of the Civil Code, and it can be reduced by a court at the request of a harmed heir.
Will
A will is the instrument through which a person disposes, for after their death, of the portion of their estate that the law allows them to freely dispose of, always respecting the reserved share of the forced heirs. The Civil Code governs testamentary succession starting at Article 1,857, and recognizes three ordinary forms: the public will, drawn up by a notary before witnesses; the closed will, written and delivered sealed to the notary; and the private will, handwritten or typed and signed in the presence of witnesses. The public will is the most commonly used because of its formal security, since it is recorded at the notary's office.
A couple with two properties, financial investments, and a small business, for example, could combine a holding company for the business and the jointly used properties, a gift with reserved usufruct for a property used exclusively by one of the children, and a will to direct the disposable portion and name who will manage assets until a grandchild reaches legal age. The right combination depends on a diagnosis of each family's situation, not a ready-made formula.
| Instrument | What It Does | When It Tends to Be Worthwhile | Formalized Through |
|---|---|---|---|
| Holding company | Consolidates assets into a company and organizes the gifting of shares to heirs | Estates with multiple properties, a family business, or a need for governance | Articles of association and a notarized gift of shares |
| Gift with reserved usufruct | Transfers ownership of a specific asset while keeping use and income for the donor | A standalone asset, with no need for a corporate structure | Public deed of gift |
| Will | Sets the destination of the disposable portion of the estate and other expressions of intent | Whenever there is a specific wish beyond intestate succession | Notary's office, in public form |
When to Start Estate Planning
There is no mandatory minimum age, but a few signs suggest the time has come. Being over 60 with significant assets is the most obvious one. Having a family business with no defined successor is another. Having heirs who no longer get along, or a second marriage with children from different relationships, also calls for extra attention, because these are precisely the scenarios in which a lack of planning most often leads to disputes.
The window opened by Complementary Law 227/2026 reinforces the urgency for anyone with assets above their state's exemption threshold. There is a gap between the national ITCMD regulation and the point when the state laws take effect to apply progressivity along the lines now defined, expected in 2027 in most states. A family with a property worth R$ 1.2 million and a small factory valued at R$ 3 million, for example, has much more room to maneuver if they structure the succession within this window than if they wait for the state rules to change, when the valuation basis for company ownership stakes tends to move closer to real market value.
The WF Advogados POPP 65+ Program
Real estate planning does not start with the tool, it starts with the diagnosis. That is the principle behind POPP 65+, the WF Advogados asset protection program designed for families who want to organize succession with legal certainty. The work begins with a complete mapping of the estate, the heirs, and the family's specific risks, and only then decides whether the right structure is a holding company, a gift, a will, or a combination of the three.
The program also tracks the recent changes to the ITCMD, including the progressivity introduced by the Tax Reform and by Complementary Law 227/2026, so that the structure chosen today remains effective once the new state rules take effect.
How to Structure Your Estate Planning
1. Take stock of the full estate. List real estate, ownership stakes in companies, bank accounts, investments, and other significant movable assets, along with who holds title to each one. 2. Map the heirs and the relationships between them. Identify forced heirs, children from different relationships, minors or legally incapacitated heirs, and how well they get along. 3. Simulate the ITCMD under the current scenario. Calculate the tax impact assuming plain probate, with no planning at all, as a baseline for comparison. 4. Evaluate the available instruments. Compare a holding company, a gift with reserved usufruct, and a will in light of the estate and family structure identified. 5. Formalize the chosen structure. Set up the holding company, execute the deed of gift, or draft the will, always with legal guidance, since each instrument has its own formal requirements. 6. Review it periodically. Changes in the makeup of the estate, in the heirs' marital status, or in the law, such as the changes now underway with the ITCMD, call for a review of the structure.
This content is for informational purposes only and does not replace individual legal consultation. Each case has particularities that require specific analysis.
Dr. Wendel Ferreira Lopes — Attorney, OAB/MG nº 18.881. Founding partner of WF Advogados, practicing in Tax, Banking, and Estate/Succession Law since 1999. Uberlândia, Brazil.
Frequently Asked Questions
What is estate planning?
It is the set of decisions made during a person's lifetime to organize how their or their family's assets will be transferred to their heirs, using instruments such as a holding company, a gift with reserved usufruct, and a will, instead of leaving everything to be decided by intestate succession alone.
Is estate planning only worthwhile for people with a lot of assets?
Not necessarily. It makes the most sense for those who own real estate, have a family business, or hold assets above the ITCMD exemption threshold, but even families with a moderate estate benefit from reducing the risk of conflict among heirs.
What is the difference between estate planning and probate?
Probate is the procedure that takes place after death to determine and divide the assets. Estate planning happens before that, during a person's lifetime, and organizes the transfer so that probate, when it does happen, is simpler, faster, and cheaper.
Does a holding company replace a will?
No. They are complementary instruments. The holding company organizes title to assets and the gifting of shares during the owner's lifetime, while the will sets the destination of the disposable portion of the estate and other expressions of intent that the holding company does not cover.
How much can I gift during my lifetime without harming my heirs?
Anyone with forced heirs (descendants, ascendants, or a spouse) may only freely dispose of half of their estate, the disposable portion, under Article 1,846 of the Civil Code. A gift beyond this limit is an inofficious gift and can be reduced by a court.
What is a gift with reserved usufruct?
It is a gift of an asset in which the donor transfers ownership to the heir but keeps for themselves the right to use the asset and collect its income for as long as they live.
Does a private will have the same validity as a public one?
All three forms, public, closed, and private, are valid ordinary forms provided for in the Civil Code. The public will tends to be preferred because it is recorded at the notary's office before a notary public, which reduces the risk of its authenticity being challenged.
Does estate planning reduce the amount of ITCMD owed?
It can, depending on the structure and the timing, because it moves part of the transfer forward and uses the legal instruments available before the new state progressivity rules take effect. There is no guarantee of a specific value or percentage — the outcome depends on the case.
What changes under Complementary Law 227/2026 for those who already have a holding company?
LC 227/2026 made ITCMD progressivity mandatory nationwide and changed how ownership stakes in companies are valued, bringing the tax base closer to market value. Holding companies structured under the old valuation basis will likely need to be reviewed.
Can I handle estate planning on my own, without a lawyer?
It is not advisable. A holding company, a gift, and a will each have specific formal requirements, and out-of-court probate by public deed, provided for under Law 11,441/2007, requires that all parties be represented by a lawyer.
How long does it take to complete an estate plan?
It varies depending on the complexity of the estate and the instrument chosen. A simple gift or a will can be formalized within weeks, while setting up a holding company with a reorganization of assets usually takes a few months, between diagnosis, structuring, and registration.