Estate planning: have you decided what will happen to your assets?

Sam Walton’s story shows that the best wealth structure is the one built before the wealth grows. In Brazil, Supplementary Law No. 227/2026 has made this decision even more urgent.

In 1953, Walmart did not yet exist. Sam Walton owned a small retail operation in rural Arkansas, with a handful of stores and no expectation that he would build one of the world's largest fortunes. It was that year, following his father-in-law's advice, that he put what little he had into a family partnership with his wife and four children. Thus, Walton Enterprises was born; it still exists today and manages the largest family fortune on the planet, as noted in the Wikipedia entry for Walton Enterprises.

The structure was simple. Each of the four children received 20% of the partnership. Sam and Helen kept the remaining 20%. When Walmart grew, it grew within that partnership.

The 1953 decision was worth $18 billion

When Sam Walton died in 1992, he held only 10% of Walton Enterprises. The other 90% had already belonged to the family for nearly four decades. In practice, he transferred more than $18 billion to his heirs with virtually no estate tax, according to an analysis by the American firm Midgett Preti Olansen, in a country where the estate tax rate reached 55% at the time.

In his autobiography Made in America, Walton explains the reasoning behind the structure. As he summarized in an excerpt highlighted by Yahoo Finance, the best way to reduce estate tax is to transfer assets before they appreciate. The transfer was made when the shares were worth almost nothing. The appreciation happened while they were already in the children's hands.

The detail that often goes unnoticed is that Walton did not know he would become a billionaire. He structured his wealth when it was small, and that is exactly why the structure worked. According to a Bloomberg report published by Accounting Today, the Walton family has kept its Walmart holdings within that same partnership since 1953, spanning three generations without public corporate disputes or forced asset sales to pay taxes.

What most Brazilian families do differently

Most families with significant wealth in Brazil know their assets well. They know how much they have in real estate, corporate holdings, financial investments, and offshore structures. What these families often lack is the conscious decision to organize the transfer of this wealth while they still have the freedom of choice.

Without planning, succession happens anyway. The only difference is that the law, the probate process, and the tax rate in effect at the time of death make the decisions. The Civil Code (Law No. 10,406/2002) establishes the principle of saisine in Article 1,784, stating that an inheritance is transmitted to the heirs the moment death occurs, subject to all rules in effect on that day. Assets built over decades become subject to a process the family did not design.

Tax reform has changed the cost of waiting

Until recently, the argument for those who preferred to wait was well-known. The Brazilian ITCMD (inheritance and gift tax), with an 8% ceiling set by Senate Resolution No. 9/1992, was among the lowest in the world, and many states charged a flat rate of 4%.

This scenario was altered by Constitutional Amendment No. 132/2023 and the subsequent regulations. Bill PLP 108/2024 (Chamber of Deputies), approved by Congress in December 2025 and signed into law on January 13, 2026, as reported by Consultor Jurídico, became Supplementary Law No. 227/2026, redefining national rules for inheritance and gift taxes. Three changes deserve the attention of any family with significant assets.

Mandatory progressivity. All states must adopt progressive tax rates based on the value transmitted, while respecting the 8% ceiling, as detailed in the analysis by IOB. States that currently charge a low flat rate are likely to increase taxation on large estates as they adjust their local laws.

Market value as the tax base. The new law mandates that the tax be levied on the market value of assets and rights, moving away from historical, book, or declared values. For corporate holdings and real estate held at older values, the difference can be significant.

Taxation of assets abroad. The supplementary law resolved a long-standing controversy and now expressly regulates the application of ITCMD to assets held outside Brazil, a topic that previously depended on judicial rulings.

Since these changes depend on the adaptation of state legislation and must observe constitutional rules regarding non-retroactivity, most practical effects will take hold starting in 2027. This means there is still a window to plan under the current rules. It just isn't permanent.

Planning is deciding while there is still a choice.

Estate and succession planning goes far beyond tax savings. It determines whether a family will execute a plan or manage a crisis. The instruments available under Brazilian law are well-known and tested.

• Family holding company. Organizes equity interests and real estate under a corporate structure with governance rules defined during one's lifetime, following the logic the Waltons applied in 1953.
• Donation with reservation of usufruct. Provided for in articles 1,390 and following of the Civil Code, it allows for the advance transfer of ownership while keeping the donor in control and entitled to the income from the assets.
• Lifetime asset division. Authorized by article 2,018 of the Civil Code, it allows the owner to define the division among heirs, provided the mandatory share is preserved.
• Will. Organizes the disposable portion of the estate and reduces the room for conflict among heirs.
• Pension plans and insurance. Create immediate liquidity so the family does not need to sell assets in a hurry to cover probate costs and taxes.

None of these instruments work well when improvised. They all work better the sooner they are implemented, because advance transfer captures today's values, not tomorrow's. That was Sam Walton's bet, made when no one would have bet on him.

The cost of not deciding

Probate in Brazil consumes, on average, between 10% and 20% of an estate when adding up inheritance taxes, court costs, legal fees, and the deterioration of assets that remain frozen during the process, which can take years. To this financial cost is added a silent one. Family businesses without a defined succession lose value, unprepared heir-partners enter into conflict, and investment decisions become paralyzed.

Those who plan early protect what they have built and choose how that wealth will serve their family. Those who delay outsource this choice to taxes and chance.

If your family has not yet made this decision, now is the time to talk. Contact us.