Rodrigo Gonçalves Pimentel, attorney and son of appellate judge Sideni Soncini Pimentel, notes that the internationalization of assets owned by Brazilian business families has increasingly required legal structures capable of addressing challenges that go beyond the limits of traditional estate planning. In this context, interest has grown in instruments commonly used in foreign jurisdictions, such as trusts, especially among families with assets abroad seeking solutions focused on asset protection, privacy, and international succession planning. Unlike a family holding company, a trust operates under its own legal framework, capable of offering specific mechanisms for asset management and preservation in transnational scenarios.
Throughout this article, you will understand in which situations a trust becomes relevant within an international asset protection framework and which precautions must be considered in order to use it safely and strategically.
Trusts and Holding Companies: Different Structures for Different Objectives
A trust operates under a legal logic that differs significantly from the one used by a family holding company. In this structure, the settlor transfers certain assets to a trustee, who becomes responsible for managing them for the benefit of the individuals designated in the trust instrument. This arrangement creates a separation between legal ownership and economic benefit that has no direct equivalent under Brazilian law, making the trust a particularly useful tool in international estate planning.
Rodrigo Gonçalves Pimentel explains that the main practical difference between a trust and a holding company lies precisely in the level of asset separation produced by each structure. While, in a holding company, the shareholders remain owners of the equity interests and maintain indirect control over the assets, in a trust, legal ownership is transferred to the trustee, who must act according to the rules previously established by the settlor.
This characteristic may provide stronger asset protection in certain international scenarios, especially in succession matters and creditor protection cases. At the same time, it requires a high degree of trust in the chosen trustee and a thorough understanding of the legislation of the jurisdiction in which the trust will be established, since its operation depends directly on the applicable local laws.
What Are the Main Advantages of a Trust for Families With International Assets?
For families with assets across multiple jurisdictions, a trust offers several advantages that justify its consideration within a structured international estate plan. Among the most relevant are:
- International succession efficiency: a trust allows assets located in different countries to be transferred according to the rules of a single jurisdiction, avoiding the need to open parallel probate proceedings in multiple countries with different costs, timelines, and legal requirements;
- Protection against creditors in foreign jurisdictions: depending on the chosen jurisdiction and the timing of its establishment, a trust may provide a more robust barrier against enforcement actions than conventional corporate structures, especially in scenarios involving obligations in countries with legal systems different from Brazil’s;
- Asset privacy: in many jurisdictions, the terms of the trust and the identity of its beneficiaries are not public information, offering a level of privacy that publicly registered corporate structures cannot provide;
- Flexibility in the distribution of benefits: the trust instrument may establish sophisticated conditions for the distribution of benefits to heirs, including maturity requirements, performance standards, or specific situations the settlor wishes to address.
How Does a Trust Integrate Into the Asset Structure of a Brazilian Family?
The use of trusts by Brazilian families with overseas assets does not replace domestic estate planning instruments, but rather complements them. The family holding company remains the central instrument for organizing assets in Brazil, with all its efficiency in protecting against local contingencies and facilitating succession under Brazilian law. The trust acts as an additional organizational layer for international assets, creating a structure that respects the legal particularities of each jurisdiction while maintaining consistency throughout the overall estate plan.
According to attorney Rodrigo Gonçalves Pimentel, the integration between a domestic holding company and an international trust requires coordinated planning that takes into account the tax implications of both structures, Brazil’s tax transparency rules applicable to foreign assets, and the consistency between the trust provisions and the family governance policies established in the other instruments within the estate planning framework. Without such coordination, the trust may generate unforeseen obligations or conflicts with other structures, compromising the objectives that motivated its creation.
When Is a Trust Appropriate — and When Is It Not?
A trust is a powerful instrument, but it is not a universal solution. Its suitability depends on the family’s asset profile, the nature of the foreign assets, the specific objectives of the planning strategy, and the settlor’s willingness to relinquish direct control over the transferred assets. For families whose assets are concentrated in Brazil and who have no significant internationalization plans, the cost and complexity of a trust rarely justify its use when compared to the domestic instruments available.
Rodrigo Gonçalves Pimentel believes that the decision to use a trust should be preceded by a detailed analysis that considers not only the advantages of the structure, but also its setup and maintenance costs, the tax transparency obligations it creates, and the implications of transferring legal ownership of the assets to an external trustee. This analysis, conducted with specialized legal counsel in private international law and estate planning, is essential to ensure that the trust achieves the expected results without creating unforeseen complications that could undermine the goals of the planning strategy.
International Structures and Asset Responsibility
Rodrigo Gonçalves Pimentel emphasizes that the use of international asset protection structures, such as trusts, requires a balance between legal efficiency, transparency, and tax compliance in order for their legitimacy to remain sustainable over time. The advancement of international oversight standards and information exchange agreements has made the supervision of assets held abroad increasingly rigorous, significantly reducing the space for structures incompatible with legal reporting and taxation obligations.
Families that use trusts and other international structures within a planning strategy that fully complies with all applicable transparency and tax obligations build protection that is both legally robust and ethically sustainable. Those who seek to use these structures as a means of tax evasion or asset concealment, however, are building on a foundation that the progressive tightening of international regulations is making increasingly unstable and increasingly costly to maintain.
Author: Diego Rodríguez Velázquez
