Wealth Planning in Same-Sex Relationships

Wealth and succession planning in same-sex relationships has seen significant jurisprudential and legislative developments in recent years. However, the difficulties in understanding the subject by family members and the still-existing prejudice make it challenging for many of these unions to uphold the rights of spouses and heirs in cases of succession due to death, or even among the living.

In 2011, the Supreme Federal Court recognized the “non-existence of hierarchy or difference in legal quality between the two forms of constitution of a new and autonomous domestic nucleus,” applying to stable unions between people of the same sex the same rules and consequences of stable heterosexual unions. That is, with the recognition of same-sex relationships, and the possibility of marrying, they began to have all the property rights that apply to heterosexual relationships, such as property regime, alimony, custody, parental cohabitation regime, and inheritance rights.

Thus, a homosexual couple that has a long-lasting, public, and continuous relationship established with the aim of family formation (art. 1723 of the Civil Code) should have their stable union recognized.

Thus, a homosexual couple that has a long-lasting, public, and continuous relationship established with the aim of family formation (art. 1723 of the Civil Code) should have their stable union recognized.

The major legislative change in inheritance law occurred with the 2002 Civil Code, which elevated the spouse to the position of necessary heir, along with descendants and ascendants (art. 1835 of the Civil Code), but provided in art. 1790 much lower inheritance rights to partners compared to those granted to spouses.

However, since the Supreme Federal Court recognized that same-sex relationships should have the same protection from the State as heterosexual relationships, it deemed art. 1790 unconstitutional, understanding it as illegitimate to differentiate, for inheritance purposes, between spouses and partners. This hierarchy was considered incompatible with the 1988 Constitution, violating principles of equality, human dignity, proportionality as a prohibition of insufficient protection, and the prohibition of regression, thereby granting partners, whether in same-sex or heterosexual relationships, the same inheritance rights as spouses.

However, since the Supreme Federal Court recognized that same-sex relationships should have the same protection from the State as heterosexual relationships, it deemed art. 1790 unconstitutional, understanding it as illegitimate to differentiate, for inheritance purposes, between spouses and partners.

This hierarchy was considered incompatible with the 1988 Constitution, violating principles of equality, human dignity, proportionality as a prohibition of insufficient protection, and the prohibition of regression, thereby granting partners, whether in same-sex or heterosexual relationships, the same inheritance rights as spouses.

With this equalization and the ruling of unconstitutionality of art. 1790 of the Civil Code, surviving spouses and partners from both heterosexual and homosexual couples inherit—at least—half of the deceased spouse’s or partner’s assets, competing alongside descendants or ascendants, if married under the total separation of property regime; or, if married under the partial community of property regime, regarding exclusive assets; or the totality of assets, competing with ascendants and descendants, in the absence of a will. Thus, to expand or reduce inheritance rights, same-sex and heterosexual couples must be mindful when choosing the “instrument” that will regulate their relationship, which can be marriage or a stable union with a public deed or private instrument, or without written documentation.

In marriage and stable union with a public deed or private instrument, parties can choose one of the property regimes listed in the Civil Code, that is, they can marry or establish a stable union under the partial community of property regime; the absolute separation of property regime; or the community of property regime. Therefore, for the property regime applied in a heterosexual or same-sex relationship to be that of total separation of property or partial community of property, it is mandatory to execute a prenuptial agreement before marriage, or to stipulate these regimes in the public deed or private instrument in the stable union. Whenever marriage or the public deed or private instrument of the stable union and the de facto stable union (without written document) are silent on the property regime, the partial community of property regime applies.

Additionally, in marriage, the spouse will always be, along with descendants and ascendants, a necessary heir with the right to the legitimate portion, that is, half of the deceased’s assets, whenever married under the partial community or total separation of property regimes. Therefore, being married under the total separation of property regime does not deprive the spouse or partner of the right to participate in the inheritance. The only way to reduce or expand the inheritance rights of the spouse or partner is through a will disposing of half of the estate (available portion).

In the case of the death of one partner in a same-sex couple with a long-lasting, public, and continuous relationship established for the purpose of family formation, but who did not formalize this relationship (by public deed or private instrument), they may have inheritance rights through a post-mortem stable union recognition action, a complex, lengthy, and burdensome procedure for the parties involved.

Therefore, same-sex couples are guaranteed all inheritance rights as spouses or partners and must be mindful of the choice of property regime, as well as know and use existing instruments to—within legal limits—allocate their estate to their chosen beneficiaries. It is emphasized that the choice of beneficiaries is limited to half of their estate whenever there are ascendants, descendants, and a spouse or partner, through a will that can specify, clause, and appoint a guardian to manage the estate if the beneficiary is a minor.

The long-awaited and celebrated equality of rights between homosexual and heterosexual couples goes beyond the celebration of affection, as it places homosexual couples as subjects of rights and obligations arising from their relationship, regardless of their sexual orientation. In addition to the will, homosexual couples can and should use succession planning such as living distribution, usufruct, private pension, life insurance, donation, shareholder agreement, trust, and others.
Finally, it is important to remember that issues related to taxation in succession or donation, especially by the Tax on Transmission Cause Mortis and Donation (ITCMD) and the Individual Income Tax, are also identically applicable to both homosexual and heterosexual unions, with no distinction allowed.