For many Brazilian families, owning real estate, bank accounts, or investments abroad is no longer the exception. Along with these assets come foreign legal concepts that require careful consideration. One of the most common is Joint Tenancy with Right of Survivorship, a form of ownership widely used in the United States and other common law jurisdictions.
Joint tenancy is a form of co-ownership that may apply to virtually any type of asset, in which each joint tenant owns the whole rather than a fractional interest. Consequently, upon the death of one joint tenant, there is no succession of that person's share. Instead, the deceased's interest is extinguished, and ownership automatically vests in the surviving joint tenant(s) by operation of the right of survivorship. Technically, there is no transfer of ownership upon death, but rather a consolidation of title, which is why the asset does not become part of the deceased's probate estate.
At first glance, joint tenancy appears to be an ideal solution for individuals who own assets outside Brazil. Upon the death of one joint tenant, ownership automatically passes to the surviving joint tenant without the need for probate, making the succession process faster and less burdensome. It is therefore unsurprising that this structure has become increasingly common in the estate planning of Brazilian families. However, adopting it without fully understanding its legal implications may ultimately create the very disputes it is intended to avoid.
A vantagem é concreta. Em diversas jurisdições, a estrutura reduz a burocracia do inventário, confere previsibilidade à destinação do patrimônio e favorece a continuidade da gestão dos bens. Mas essa aparente simplicidade não dispensa análise jurídica criteriosa — sobretudo quando envolve brasileiros ou residentes no Brasil.
The first point concerns inheritance law.
Brazilian law protects forced heirs by reserving for them the legítima—the portion of an estate that must be allocated by law to descendants, ascendants, and the surviving spouse or partner. An arrangement that transfers ownership directly to the surviving joint tenant may, in practice, circumvent this statutory protection.
This is precisely where important considerations arise for Brazilian families. Recently, the São Paulo Court of Justice reaffirmed the limits of Brazilian jurisdiction over assets located abroad in inheritance matters—a topic we addressed in another article in this newsletter (click here). As a result, Brazilian courts are limited to deciding inheritance issues involving assets located in Brazil and lack jurisdiction over assets situated abroad, which remain subject to the succession rules of the country where they are located, including any probate requirements imposed under local law.
Accordingly, anyone establishing a joint tenancy should carefully consider whether the arrangement could affect the mandatory inheritance rights of Brazilian forced heirs and potentially distort the intended distribution of the estate.
The second point concerns restrictions on the owner's freedom to dispose of the asset..
A joint tenancy pode retirar a flexibilidade de disposição patrimonial anteriormente detida pelo proprietário. Uma vez incluído um cotitular, eventuais decisões sobre a propriedade do bem, assim como a própria exclusão do cotitular, dependerão da concordância dele. A autonomia patrimonial que o proprietário do bem tinha antes de forma unilateral, passa a depender da concordância do cotitular.
Consider the following example: if a father and his two children hold an asset as joint tenants, and one of the children dies, ownership will automatically vest solely in the father and the surviving sibling, excluding the deceased child's spouse and children. As a result, for the deceased child's family—particularly the patriarch's grandchild—to acquire any interest in that asset, the approval of both the grandfather and the surviving uncle would be required.
A third aspect deserving careful consideration is the Brazilian tax treatment of joint tenancy arrangements. Two areas deserve particular attention: reporting foreign assets in the Brazilian Individual Income Tax Return (DIRPF) and the potential application of the Brazilian inheritance and gift tax (ITCMD).
With respect to income tax reporting, the Brazilian Federal Revenue Service advises taxpayers to first determine the legal effects of joint tenancy under the applicable foreign law with the assistance of local counsel. Depending on the jurisdiction, the arrangement may be characterized as a form of co-ownership. In such cases, for Brazilian income tax purposes, the Brazilian rules governing co-owned property should apply, and each taxpayer should report their ownership interest proportionately, as provided in the Federal Revenue Service's guidance on the taxation of foreign assets (Law No. 14,754/2023).
The ITCMD landscape is even more complex. For many years, the taxation of foreign assets was affected by Supreme Federal Court (STF) Precedent (Theme No. 825), which held that a federal complementary law was required before Brazilian states could levy inheritance and gift tax on foreign assets. Even after Constitutional Amendment No. 132/2023, the STF reaffirmed that the amendment did not validate state laws previously declared unconstitutional, including the legislation enacted by the State of São Paulo (ADI 6830/SP; AgR in RE 1.553.620/SP). Complementary Law No. 227/2026 addressed this legislative gap by providing that, where the deceased or donor is domiciled abroad, the tax is due to the Brazilian state in which the heir or donee is domiciled. Even so, taxation is not yet automatic, as each state must enact its own implementing legislation, subject to constitutional rules governing the effectiveness of new tax laws. Accordingly, the practical application of the tax remains under discussion.
Beyond the broader debate surrounding the incidence of ITCMD on foreign assets, the unique characteristics of joint tenancy create an additional layer of uncertainty. Since the death of a joint tenant results not in a transfer of ownership but in the consolidation of title in the surviving joint tenant, an important legal question arises: does this event constitute a taxable transfer for ITCMD purposes? If so, which Brazilian state would have jurisdiction to impose the tax? These are questions that Brazil's new legal framework has only begun to address.
Because joint tenancy raises important succession, property, and tax considerations, we return to the central message of this article: joint tenancy can indeed be an effective estate planning tool. However, its value lies not in simply adopting a foreign legal structure, but in evaluating it as part of a broader estate planning strategy that takes into account the applicable marital property regime, the rights of forced heirs, wills, trusts, corporate holding structures, and the Brazilian tax consequences of owning assets abroad.
No fim, a pergunta certa não é se a joint tenancy funciona lá fora, mas o que ela provoca aqui. Quando bem utilizada, a cláusula dá fluidez à sucessão internacional. Se mal utilizada, transforma a economia de hoje no litígio de amanhã (familiar ou fiscal). A diferença está, sempre, no planejamento.
Murilo Muniz
Attorney-at-Law
Franzim Consultoria Jurídica