Coordinated Succession Pact

In summary: there is no single contract that settles the inheritance in both countries. What is done is to combine the instruments permitted in each one, without one canceling the other.

Portuguese law defines the concept. There is contractual succession when someone, by contract, waives the inheritance of a living person, or disposes of their own estate or of the estate of another person who has not yet died (Art. 2028(1) of the Portuguese Civil Code (Código Civil)). The European Succession Regulation uses a similar idea: a succession pact is an agreement that creates, modifies or terminates rights in a future estate (Art. 3(1)(b) of Regulation (EU) 650/2012).

The difference from a will is important:

• Will: it is an act of a single person. That person can change or revoke it at any time (Art. 1,858 of the Brazilian Civil Code; Art. 2311 of the Portuguese Civil Code).
• Succession pact: it is a contract between two or more people. As a rule, those who signed it cannot undo it on their own.

On this page, coordinated succession pact is the name we give to a plan. It brings together a will, gifts, lifetime partition, the matrimonial property regime and, where Portuguese law allows it, a pact in the strict sense. Each piece follows the form of the country where it will be used. All of them point to the same result.

The prohibition

Art. 426 of the Brazilian Civil Code (Código Civil) states: "The inheritance of a living person may not be the subject of a contract." In practice, this means that:

• a child cannot sell or assign, by contract, the share they will one day inherit from their parents;
• parents cannot promise, by contract, to leave their estate to someone;
• no one can waive the inheritance of a living person before that person dies. A waiver is only possible after the death, by public deed or by a statement filed in the court proceedings (Art. 1,806).

The Brazilian prenuptial agreement (pacto antenupcial), that is, the contract the future spouses sign before the marriage to choose the property regime, also cannot deal with the inheritance of either spouse. See the page on marriage and property regimes.

What is permitted

• Will: a person who has forced heirs (children, grandchildren, parents, grandparents and the spouse, Art. 1,845) can freely leave only half of the estate, the so-called disposable portion (Art. 1,789). The other half is the forced share (legítima), which the law reserves for these heirs (Art. 1,846). The will can indicate which assets go to each heir (Art. 2,014). See the page on wills.
• Lifetime gift: a gift from parents to a child, or from one spouse to the other, is treated as an advance on the inheritance (Art. 544). After the death, the child who received it must report its value in the inventory proceedings so that the shares are equalized. This adjustment is called collation (Art. 2,002). The donor may waive collation, provided the value fits within the disposable portion; the waiver must be stated in the gift itself or in the will (Arts. 2,005 and 2,006). A gift that exceeds what the person could leave by will is void to that extent (Art. 549).
• Gift with reserved usufruct: the donor transfers ownership to the children but continues living in the property or receiving the rent for life. The law also prohibits giving away all one's assets without keeping enough for one's own support (Art. 548).
• Lifetime partition: parents can divide their assets among their children during their lifetime, by deed, or set out the division in a will, provided they respect the forced share (Art. 2,018).
• Protective clauses: it is possible to require that an asset not be sold (inalienability), seized or shared with the heir's spouse (incommunicability). For assets in the forced share, these clauses require a just cause stated in the will (Art. 1,848). Inalienability imposed in a gift or will implies the other two (Art. 1,911).
• Family holding company: a company that holds the family's assets can organize management and the transfer of shares to the children. It is not, in itself, a way to pay less tax, and the transferred shares remain subject to the forced share rules and to ITCMD, the Brazilian state tax on inheritances and gifts. More details on the page on international succession.

The Portuguese rule is similar to the Brazilian one, but it has exceptions. Contracts about an inheritance are only allowed in the cases provided for by law; all others are void (Art. 2028(2) of the Portuguese Civil Code). The prenuptial agreement (convenção antenupcial), which is the future spouses' contract on the property regime, also cannot regulate the inheritance, except in the cases expressly permitted (Art. 1699(1)(a)).

What the prenuptial agreement may contain

Under Art. 1700, the prenuptial agreement may include:

• the appointment of one of the future spouses as heir or legatee (a person who receives a specific asset) of the other, or of a third party, such as the parents of one of them;
• the appointment, by one of the future spouses, of a third party as heir or legatee;
• the mutual waiver of the status of forced heir of the other spouse, explained in the next section.

Once an appointment in favor of one of the future spouses is accepted, it cannot be revoked by only one of the parties (Art. 1701). An appointment in favor of a third party who does not take part as an accepting party is valid only as a will (Art. 1704).

Lifetime partition

Portuguese law does not treat as a succession pact the gift, with or without reserved usufruct, of assets to one or more future forced heirs, provided the others agree and receive in cash the value of the share that would be due to them (Art. 2029(1)). If another forced heir appears later, that heir can claim their share in cash (Art. 2029(2)).

What remains prohibited

While the person whose estate is at stake is alive, the heirs cannot waive the right to ask for the reduction of gifts that impair the forced share (Art. 2170). Outside the cases provided for by law, an agreement about a future inheritance is void.

Since Law 48/2018 (Lei), future spouses may waive, with respect to each other, the status of forced heir (herdeiro legitimário). A forced heir is a person whom Portuguese law protects with a minimum share of the estate, the forced share (legítima). With the waiver, the spouse no longer has that reserved share.

Requirements

• Only in the prenuptial agreement: the waiver must be included in the agreement made before the marriage (Art. 1700(1)(c)). After the marriage, the agreement, as a rule, can no longer be changed (Art. 1714).
• It must be mutual: both spouses waive.
• Only with separation of property: the regime must be separation of property, chosen by the couple or imposed by law (Art. 1700(3)). In Portugal, separation is imposed, for example, on people who marry at age 60 or older (Art. 1720).
• It may be conditional: the waiver may depend, for example, on whether or not there are children when one of the spouses dies. The condition does not have to be the same for both (Art. 1707-A(1)).

What the spouse keeps

• the right to support (alimony) and social security death benefits (Art. 1707-A(2));
• if the family home belonged to the deceased, the right to continue living there for five years, with use of its contents. The right is for life if the spouse is 65 or older on the date of death (Art. 1707-A(3) and (10)). It does not exist if the spouse owns a home in the same concelho (the municipality, in Portugal) or, if the home is in Lisbon or Porto, also in the neighboring municipalities (para. 6);
• the possibility of receiving gifts or bequests by will from the other spouse: up to the value of the forced share to which they would have been entitled, these gifts and bequests cannot be reduced by the other heirs (Art. 2168(2)).

And in Brazil?

Brazilian law has no equivalent concept and prohibits contracts about the inheritance of a living person (Art. 426). In Brazil, a spouse married under the conventional separation of property regime remains a forced heir (Arts. 1,829, I, and 1,845). The effect of a Portuguese waiver on assets located in Brazil depends on the law that will govern the succession and must be analyzed case by case.

Even with respect to Portugal, there is a point to check in advance. The European Regulation assesses whether a pact is allowed under the law that would govern the succession if the person died on the day of signing (Art. 25 of Regulation (EU) 650/2012). Anyone who signs the agreement while living in Brazil needs to check this point beforehand. The same article allows, under certain conditions, choosing for the pact the law of the nationality of one of the future spouses (Art. 25(3)).

Before Portuguese authorities: Art. 22 of the Regulation

As a rule, the estate follows the law of the country where the person had their habitual residence (the place where they lived on a stable basis) at the time of death (Art. 21 of the Regulation). However, a person may choose, for their entire succession, the law of the country of which they are a national. A person with both Brazilian and Portuguese nationality may choose either one (Art. 22(1)).

• The choice must be made in a will or in another disposition of property upon death, expressly or in a way that is clear from its terms (Art. 22(2)).
• The chosen law decides, among other points, the disposable portion, the forced share and the collation of gifts (Art. 23(2)(h) and (i)).
• To change or revoke the choice, the formalities required to change or revoke a will must be met (Art. 22(4)).

Before Brazilian authorities: Art. 10 of the LINDB

Brazil does not apply the Regulation. Under Art. 10 of the Law of Introduction to the Norms of Brazilian Law (LINDB), succession follows the law of the country where the deceased was domiciled, whatever the type of asset and wherever it is located. The LINDB does not provide for a choice of law by the testator. Paragraph 1 protects the Brazilian spouse and children with respect to assets of foreign nationals located in Brazil, when the foreign law is less favorable to them. And the inventory of assets located in Brazil always falls to the Brazilian courts or notaries (Art. 23, II, of the Code of Civil Procedure (CPC)).

What this means

Example: a Brazilian living in Portugal chooses Brazilian law in their will. Portugal respects the choice. In Brazil, however, the rule is to apply the law of the domicile, which would be Portuguese law. So the same estate may be divided under one law in one country and under another law in the other, especially regarding the forced share. A choice of law can be useful, but it should be decided by looking at where the assets and the heirs are. See also the page on international succession.

1. Map of the family and assets: nationalities, country of residence and domicile, heirs, assets in each country and gifts already made.
2. Applicable law in both scenarios: which law would govern the estate today, before Brazilian and before Portuguese authorities, and what changes with a possible choice of law.
3. Matrimonial property regime: before the estate is divided, the half share of the marital property (meação), which is the spouse's share under the property regime, is set apart. That is why the Brazilian prenuptial agreement and the Portuguese prenuptial agreement are part of the plan. The law that governs the property regime may not be the same as the one that governs the inheritance (Art. 1(2)(d) of the Regulation).
4. Gifts: made by deed, with reserved usufruct when it makes sense, and with a written waiver of collation when that is the donor's wish. Gifts are counted toward the forced share in both countries.
5. Wills without contradictions: there may be one will in each country, each in the local form and dealing with the assets located there. The revocation clause should be limited to the assets covered by that will, so that the more recent one does not cancel the one made in the other country. If there is a choice of law, it should be the same in both. See the page on wills.
6. Documents: updated birth and marriage certificates, transcription of the marriage in Portugal when one of the spouses is Portuguese, property deeds and registrations, and an apostille on documents that go from one country to the other.
7. Review: moving to another country, marriage, divorce, the birth of children or grandchildren, and the purchase or sale of significant assets are times to review the plan.

Simplified example: a Brazilian couple lives in the Algarve and has an apartment in São Paulo, a house in Portugal and two children. The wife is also Portuguese. One possible plan combines a public will in Portugal and another in Brazil, each covering the assets in its country, with the same decision on the choice of law. The gift of the apartment to the children, with reserved usufruct, is made in Brazil and counts as an advance on the forced share. This is an illustration, not a recommendation: the right structure depends on each family.

No instrument allows you to set aside the forced share under the law that will govern the estate.

• In Brazil: when there are forced heirs, the forced share is half of the estate (Arts. 1,789 and 1,846).
• In Portugal: it ranges from one third to two thirds. For example, with a spouse and children it is two thirds (Art. 2159). The testator also cannot impose charges on the forced share (Art. 2163).
• Gifts count: in both countries, lifetime gifts are included in the calculation. A gift that impairs the forced share can be reduced after the death (Art. 549 of the Brazilian Civil Code; Arts. 2162 and 2168 of the Portuguese Civil Code).

With a spouse and children, the freely disposable portion is half in Brazil and one third in Portugal. A plan made with only Brazilian law in mind may be reduced if the estate ends up governed by Portuguese law, and vice versa.

Taxes: the estate and gifts may be subject to ITCMD in Brazil and Stamp Duty (Imposto do Selo) in Portugal, depending on the asset, the family relationship and each person's domicile. The plan takes taxes into account, but there is no automatic result, and we do not promise tax savings. See the page on estate planning.

With offices in São Paulo and Albufeira, Sene & Araújo assists families with assets in Brazil and Portugal with their estate planning.

• Review of the family, nationalities, residence, matrimonial property regime and assets in each country.
• Analysis of the applicable law before Brazilian and Portuguese authorities, with and without a choice of law, and comparison of the forced share in each scenario.
• Drafting of coordinated wills, deeds of gift and of lifetime partition, prenuptial agreements in Brazil and in Portugal, including, where applicable, the mutual waiver.
• Support with the acts before the Brazilian notary's office, the Portuguese notary's office or registry office (conservatória), and with the registrations.
• Periodic review of the plan and, after the death, inventory proceedings in Brazil and declaration of heirs in Portugal.