Do you know the structure oftrust?

Written by: Paulo Todai

Efficient mechanism of patrimonial succession and financial organization in favor of the heirs.

Have you ever stopped to think about the possibility of delegating the administration of your personal and family assets to a third party so that he can manage and distribute the fruits to his heirs, as previously provided in a contract with rules previously stipulated by you? Seems like a distant and little used reality, doesn't it?

However, the above idea is a common practice, internationally called de trust, which is nothing more than a mechanism that allows an individual (settlor) transfer your assets to a third party (trustee) for the latter to administer them in favor of certain beneficiaries (beneficiaries), according to rules defined in a contract (trust agreement/trust deed).

It is an institute widely used abroad for estate and succession planning, and is typical of English law, originating in countries that adopt the common system.law.

Essentially, thetrustit is a way of protecting the assets of a given person, and ensuring that they are used for the benefit of previously defined beneficiaries (generally children and other heirs).

Otrustee, or administrator, can be anyone; they are usually financial institutions or highly qualified professionals in wealth management. The beneficiaries can be both natural and legal persons.

Otrustis an excellent way to ensure the protection of family assets and ensure that they are used properly, perpetuating a legacy built over time, whether to provide income for beneficiaries during their lifetime, or even after the death of thesettlor. (founder owner of the assets).

There are many situations allowed in this contractual modality, from asset management in favor of minor children or legally incapable persons, professional asset management, management in case of disability/interdiction of the owner, to the delivery of assets in the event of death. OtrustIt thus functions as a legitimate legal instrument for inheritance and estate planning.

In Brazil, there is still no specific legislation on thetrust, which adopted the Romano-Germanic/civilian systemlaw, although there is already a bill in progress in the Chamber of Deputies (Bill No. 4,758/20), authored by Deputy EnricoMisasi.

Meanwhile, even with the absence of specific regulation, thetrusthas been increasingly used in Brazil as a mechanism for estate and succession planning, as it offers several advantages in relation to other existing legal structures.

As usually thetrustsare constituted in international jurisdictions, there is another great advantage in the tax field, as it can also minimize or eliminate certain taxation.

So, the figure oftrust, despite not currently being encouraged by Brazilian legislation, will certainly take over the scenario of managing family assets in Brazil in the near future, which will require greater knowledge and highly specialized professionals to help interested parties in the search for the best way to organize their financial life/ assets for the benefit of his heirs.

References:

Succession Planning Architecture - Volume III, Editora Fórum, 2022, Daniele Chaves Teixeira;

The Law oftrustsin Brazil, Editora Almedina, 2020, VerônicascriptoreFreire and Almeida.