Can I donate an asset to just one of my children? Would that be an anticipation of inheritance?

Yes, it is possible to donate an asset to just one of your children, but it is important to understand the rules.

In Brazil, if you have necessary heirs (children, parents or spouse), you can dispose of up to 50% of your estate free of charge (gift or will) to whomever you wish The other half, called “legitimacy”, is reserved by law for these heirs In other words, you are free to dispose of half of your assets, but the other half must be guaranteed to your heirs

In other words, no one is obliged to leave you an inheritance and you are free to use/spend your assets during your lifetime

The protection of the reserved portion is established by law (art. 1.789, Civil Code) and so is the list of necessary heirs (art. 1.845, Civil Code).

Donation to a specific child

It is possible, however, for a necessary heir to benefit from the author of the inheritance, as long as the disposition does not exceed half of the estate. This is the case, for example, in situations where a parent wishes to allocate a larger part of the estate (for various reasons) to one of their children or even to their spouse/partner.

If there is no express provision regarding exemption from collation, it is presumed that the heir has received their share of the inheritance in advance and must, upon the death of the author of the inheritance, bring the assets received to the opening of the succession of the author of the inheritance (death) so that the shares of the other necessary heirs are equalized.

Therefore, if the intention is to benefit one of the necessary heirs, the donor or testator must expressly state that this is not an anticipation of inheritance, exempting the beneficiary from collecting the goods/values received.

What assets can be donated and what is required?

• Goods of small value (such as money or objects): The donation can be made without a formal contract.

• Assets of greater value (such as cars or works of art): A notarized contract is required.

• Properties worth up to 30 minimum wages: Can be done by simple contract, but with change and validation in the property registry.

• Properties above 30 minimum wages: Requires a notarized public deed. This includes apartments, houses and commercial premises, for example.

Documents needed to donate property

To donate a property, both the donor (who is donating the property) and the recipient (donee) must present documents such as ID, CPF (notarized), proof of residence, marriage certificate, negative federal and municipal tax certificates and an up-to-date property registration certificate. If it is a company that is donating, company documents are also required, such as the CNPJ, articles of association and tax and INSS certificates.

Donation costs and taxes

Donating assets in your lifetime involves some costs, such as notary fees and taxes, depending on the case:

1. Income Tax (IR): This is levied on the capital gain, i.e. the difference between the amount you paid for the asset and the amount you are donating.

2. Real Estate Transfer Tax (ITBI): A municipal tax that must be paid when a property is transferred; the amount depends on the municipality in which the property is located.

3. Imposto de Transmissão Causa Mortis e Doação (ITCMD): A state tax that must be paid when assets are transferred by gift in life or by death; it varies from 2% to 8%, depending on the state.

Limitations

You cannot donate your entire estate, as the law requires you to keep enough for your own subsistence.

In addition, as explained, the gift cannot encroach on the share reserved for other heirs.

Donating assets during your lifetime can be an interesting alternative for organizing succession and avoiding conflicts. However, it is important to understand the limitations imposed by the law, to avoid future issues and to be aware of the costs. Consulting a lawyer can help ensure that everything is done correctly and within the law.