What Is the Best Way to Transfer Assets to Your Children During Your Lifetime?

Donation, Will, or Family Holding Company?

Planning wealth succession during one’s lifetime is a responsible measure to protect the family. It prevents disputes, ensures the asset owner's wishes are respected, and may even generate tax savings. But with so many options available, how do you know which one best fits your situation?

In this article, we explore the main ways to transfer assets during life: donation with specific clauses, will, and family holding company, as well as the tax aspects involved.

1. 📜 Donation with Specific Clauses

A donation is the legal act by which a person voluntarily transfers assets or rights to another person free of charge. It can be executed during the donor’s lifetime and formalized through a public deed, especially when involving real estate.

Legal Basis: Articles 538 to 564 of the Brazilian Civil Code.

Advantages:

✅ Allows the donor to choose the timing of the transfer;

✅ Avoids judicial probate proceedings;

✅ Can include asset protection clauses, such as:

• Inalienability: prevents the asset from being sold or transferred.

• Non-seizability: protects the asset from the beneficiary’s creditors.

• Non-communicability: prevents the asset from being considered part of the beneficiary's marital property.

Attention: The donation must respect the legal share of compulsory heirs. The donor can freely dispose of only up to 50% of their estate (Article 1.846, Brazilian Civil Code).

2. ✍️ Will

A will is the legal document by which a person disposes of their assets, in whole or in part, to take effect after death.

Legal Basis: Articles 1.857 to 1.990 of the Brazilian Civil Code.

Advantages:

• ✅ Enables succession planning without losing control of assets during life;

• ✅ Flexible — it can be changed at any time;

• ✅ Allows free disposition of up to 50% of the estate, with the remaining reserved for compulsory heirs.

Types of Wills:

• Public Will (prepared at a notary office);

• Private Will (written by the testator and signed by witnesses);

• Closed Will (confidential, registered with a notary).

  
  

Attention: A will requires a judicial probate process after death and can be contested, especially in families with conflicts.

3. 🏢Creation of a Family Holding Company

A family holding company is a legal entity created to concentrate and manage family assets, facilitating their organization and future succession.

Purpose: Succession planning and asset protection.

Advantages:

✅  Reduces costs associated with probate;

✅ Centralizes management of assets and income;

✅ Simplifies the transfer of company shares to heirs;

✅ Reduces family disputes, especially when there are high-value assets or businesses involved.

Attention: Creating and maintaining a family holding requires tax, corporate, and legal planning, with the support of specialized legal counsel.

What About Taxes? (ITCMD)

In any form of asset transfer (whether by donation or death), the Inheritance and Donation Tax (ITCMD) applies.

Tax Rates:

• Vary by state — usually between 4% and 8%;

• In São Paulo, it is currently 4%, but there are proposals for progressive increases.

Practical Tip: In the case of donations, ITCMD can be calculated only on the bare ownership, if the donor retains usufruct, reducing the taxable amount.

Conclusion

The best way to transfer assets to children or heirs during life depends on the family's profile, the type of assets, succession goals, and the structure of the estate.

• ✅ Donation with protective clauses safeguards the heirs’ assets.

• ✅ A will provides flexibility and allows for specific instructions.

• ✅ A family holding company is suitable for large estates or family businesses, offering efficiency and tax benefits.

It is highly recommended to consult a lawyer specializing in Family and Succession Law to ensure that your estate planning is both legally sound and strategically effective.

Would you like to start planning your wealth succession with security and efficiency? Contact me!

 📱 WhatsApp: (19) 9.9278-5069

 📧 E-mail: thais_marachini@hotmail.com