Case Study: Dual-Citizen Estate Plan Across Three Countries

Client Profile

Eduardo, 55, Brazilian-American dual citizen. Born in São Paulo, moved to the US at 22 for graduate school (MBA, Wharton), became a US citizen in 2004. Returned to Brazil in 2010 to run the Latin American division of a multinational consumer goods company. Now semi-retired, consulting part-time.

Sarah, 52, American citizen with Portuguese golden visa residency. Born in Philadelphia, worked in finance in New York for 20 years. Moved to Brazil with Eduardo in 2010. Obtained Portuguese golden visa in 2019 through a real estate investment, primarily as a Plan B / EU access strategy.

Married in New York in 2003 under New York law (no prenuptial agreement). Two children: Lucas (24, dual Brazilian-American citizen, works in fintech in São Paulo) and Emma (21, dual Brazilian-American citizen, college student at Georgetown University in Washington, DC).

Brazilian assets:

• Apartment in Jardins, São Paulo: R$5.8M (owned jointly)
• Commercial property in Faria Lima corridor (2 office suites): R$2.4M (Eduardo’s name)
• Brazilian equities (B3 brokerage): R$1.2M (Eduardo’s account)
• Brazilian fixed income (CDB, LCA): R$800K (Sarah’s account)

US assets:

• 401(k) from Eduardo’s prior US employer: $620,000
• Home in Austin, TX (purchased 2016 as rental investment): $580,000
• US brokerage account (Vanguard): $340,000

Portuguese assets:

• Apartment in Alfama, Lisbon: EUR 320,000 (Sarah’s name, golden visa qualifying investment)

Total estate: approximately R$8.2M (Brazil) + $1.54M (US) + EUR 320K (Portugal) = ~$4.5M USD equivalent.

The Challenge

Eduardo and Sarah came to us with a deceptively simple request: “We need a will.” What they actually needed was a coordinated estate plan spanning three legal systems with zero bilateral estate/gift tax treaties between any pair.

Jurisdictional Conflicts

Forced heirship:

• Brazil: CC Art. 1.845-1.846 require that 50% of the estate (the legítima) pass to compulsory heirs (descendants and surviving spouse). Eduardo cannot disinherit Lucas or Emma from Brazilian assets.
• Portugal: CC Art. 2156-2161 impose a legítima of 2/3 of the estate when there is a surviving spouse and children. Sarah cannot freely dispose of the Lisbon apartment.
• US: No forced heirship (except Louisiana). Eduardo and Sarah have complete testamentary freedom over US assets.

These rules conflict. Eduardo might want to leave the Faria Lima commercial property entirely to Lucas (who lives in São Paulo and could manage it). Under Brazilian forced heirship, he can only allocate 50% freely — the other 50% must be split among all compulsory heirs. Meanwhile, Sarah might want to leave the Lisbon apartment to Emma (who has expressed interest in living in Europe). Under Portuguese forced heirship, she can only freely dispose of 1/3.

Marriage regime:

• Brazil: Eduardo and Sarah married in New York, but as residents of Brazil, their marriage regime under Brazilian law is determined by the law of their first marital domicile (New York) per LINDB Art. 7, §4. New York is an equitable distribution state — not a community property state. But Brazilian courts sometimes apply the default Brazilian regime (comunhão parcial de bens) to couples living in Brazil, regardless of where they married. This creates uncertainty about whether assets acquired since 2010 are jointly or individually owned.
• Portugal: Portuguese law applies its own marriage property rules to assets located in Portugal, potentially treating the Lisbon apartment under Portuguese marital property norms.
• US: US federal estate tax treats property according to state law. Texas (where the Austin property is located) is a community property state — even though Eduardo and Sarah are not Texas residents.

Tax treaties — or lack thereof:

• Brazil-US: Income tax treaty exists (Decreto 85.985/1981). No estate or gift tax treaty.
• Brazil-Portugal: Income tax treaty exists (Decreto 4.012/2001). No estate or gift tax treaty.
• US-Portugal: Both income tax treaty and estate tax treaty exist. This is the one pair with full coverage.

Specific Tax Risks Identified

1. Double ITCMD/estate tax on the same asset: If Eduardo dies, Brazil assesses ITCMD on his Brazilian assets. The US assesses estate tax on his worldwide estate (as a US citizen). No treaty eliminates the overlap for Brazilian assets. The US unilateral foreign death tax credit (IRC §2014) provides partial relief, but it’s limited and does not cover state-level estate taxes.

2. Portuguese imposto do selo (stamp tax): Portugal imposes a 10% stamp tax on inherited assets (with exemptions for spouses, descendants, and ascendants). Sarah’s Lisbon apartment would likely be exempt from stamp tax if passed to Eduardo or the children, but would be taxable if left to any non-exempt beneficiary.

3. US 401(k) distributions: Eduardo’s 401(k) is subject to US income tax on distributions. As a Brazilian tax resident, the distributions are also taxable in Brazil. The Brazil-US treaty provides for foreign tax credits, but the credit mechanism for retirement distributions is complex and often results in residual double taxation.

4. DCBE and FBAR overlap: Eduardo must report his US and Portuguese assets on the Brazilian DCBE. He must also report his Brazilian and Portuguese accounts on the US FBAR. Sarah has the same obligations plus golden visa renewal requirements in Portugal that depend on maintaining the Lisbon property.

Our Approach

“Multi-jurisdiction estate planning is not three separate plans — it is one integrated strategy expressed through three legal systems. The wills must not contradict each other, and the tax credits must be coordinated to avoid double taxation.” — Zachariah Zagol, Founding Partner, OAB/SP 351.356

Step 1: Marriage Regime Clarification (3 weeks)

Before we could plan anything, we needed to determine the applicable marriage regime. We obtained Eduardo and Sarah’s New York marriage certificate and analyzed it under both LINDB Art. 7, §4 and São Paulo court precedent.

Our conclusion: the marriage regime for Brazilian purposes was most safely treated as comunhão parcial de bens (partial community), given 15+ years of residency in Brazil and assets predominantly acquired during the marriage while living in São Paulo. This meant assets acquired during the marriage (the Jardins apartment, commercial property, and most investments) were subject to meação (50/50 split between spouses by operation of law, not inheritance).

This determination was critical because it affected the taxable inheritance base: the surviving spouse’s meação is not subject to ITCMD, reducing the taxable amount by roughly half.

Step 2: Three Coordinated Wills (6 weeks)

We drafted three wills, each governing assets in one jurisdiction, with explicit non-revocation clauses ensuring no will invalidated the others.

Brazilian Testamento Público:

• Governs: Jardins apartment, Faria Lima commercial property, Brazilian equities and fixed income, holding company quotas (see Step 3)
• Respects forced heirship — 50% legítima divided equally among compulsory heirs (surviving spouse + Lucas + Emma), 50% parte disponível allocated per Eduardo and Sarah’s wishes
• Names Lucas as inventariante (estate administrator)
• Includes substitution clauses (substituição vulgar) in case any heir predeceases
• Explicitly states it does not revoke the US or Portuguese wills

US Pour-Over Will with Revocable Trust:

• Governs: 401(k) (via beneficiary designation), Austin property, Vanguard brokerage
• Revocable trust receives non-retirement assets at death (pour-over)
• Successor trustee: Sarah (then Lucas)
• No forced heirship constraints — full testamentary freedom
• Specific clause directing that the trust not hold or claim jurisdiction over any assets located in Brazil or Portugal
• Coordinated beneficiary designations on the 401(k) — Sarah primary, Lucas and Emma contingent (for spousal rollover advantage)

Portuguese Testamento:

• Governs: Lisbon apartment only
• Respects Portuguese forced heirship (legítima of 2/3 to spouse and descendants)
• Names Sarah as sole beneficiary of the quota disponível (1/3 disposable portion)
• Addresses golden visa maintenance requirements — includes provision for the apartment to remain in the family for the period needed to maintain Sarah’s residency status
• Explicit non-revocation clause for Brazilian and US wills

Step 3: Brazilian Holding Company for Real Estate (4 weeks)

We formed a holding company (Eduardo & Sarah Participações LTDA) to consolidate the two Brazilian real estate assets:

• Jardins apartment (R$5.8M) and Faria Lima commercial property (R$2.4M) transferred to holding
• Eduardo: 50% of quotas; Sarah: 50% of quotas
• Shareholders’ agreement with management succession, voting rules, and buy-sell provisions
• Strategic donation of quotas to Lucas and Emma with usufruct retention — executed in 2026 at book value and 4% ITCMD rate before LC 227/2026 takes effect

ITCMD on the donation: 4% of book value (~R$3.2M) = R$128,000 — compared to an estimated R$380,000-R$500,000 under post-2027 progressive rates on market value.

Step 4: FATCA/CRS Compliance Framework (2 weeks)

We built a compliance framework ensuring all reporting obligations were met across three jurisdictions:

Step 5: Life Insurance for Liquidity (2 weeks)

We arranged a life insurance policy on Eduardo’s life:

• Coverage: R$1.2M
• Beneficiary: Sarah (children contingent)
• Purpose: ITCMD liquidity and immediate living expenses
• CC Art. 794 exemption: Proceeds are exempt from ITCMD and inventory

A separate US term life policy ($500K) was maintained for US estate liquidity and the Austin property.

The Outcome

Estate Plan Coverage

Financial Impact

Timeline and Costs

Key Takeaway

Multi-jurisdiction estate planning is not three separate estate plans — it’s one integrated plan expressed through three legal systems. The wills must not contradict each other. The forced heirship rules must be respected in each jurisdiction. The tax credits must be coordinated to avoid double taxation. And the compliance filings must cover every reporting obligation without duplication or gaps. Eduardo and Sarah’s situation is increasingly common among globally mobile professionals, and the cost of getting it wrong compounds across every jurisdiction where assets sit unplanned.

“The cost of getting multi-jurisdiction estate planning wrong compounds across every country where assets sit unplanned. Each jurisdiction adds a multiplier to the risk, not a simple addition.” — Zachariah Zagol, Founding Partner, OAB/SP 351.356

If You’re Facing a Similar Situation

If you hold assets in multiple countries — whether through dual citizenship, investment, or family connections — each asset is governed by the law of its situs (location), not the law of your citizenship or residence. An estate plan that covers only one country leaves assets in the others exposed to forced heirship conflicts, double taxation, and uncoordinated probate. Our estate planning consultation maps your multi-jurisdiction exposure and designs a coordinated plan. The 2026 ITCMD window makes this year particularly urgent for Brazilian assets. Contact ZS Advogados to schedule your consultation.