In recent decisions, the São Paulo Court of Justice (TJSP) has ordered the disregard of the legal personality of family holding companies when evidence indicates the commingling of assets between individuals and the legal entity. One of the leading cases involved heirs who received real estate from their father, later contributed to a family holding and sold, even after the patriarch’s death. The debt, originally incurred by the father’s company, was attributed to the heirs through the disregard of the holding, given the use of assets as a means of shielding them from creditors.
This and other precedents reflect the Judiciary’s restrictive stance on estate planning structures which, although formally regular, reveal the intention to frustrate creditor rights—even where the asset transfers preceded the formation of the debt by several years.
Asset Protection vs. Lawful Estate Planning
The jurisprudence does not characterize family holdings as unlawful per se. On the contrary, such structures are acknowledged for their role in promoting efficiency in succession planning and asset management. Nonetheless, judicial scrutiny has been directed at practices such as:
- Simulated donations that conceal continued use of assets by the donor;
- Asset transfers carried out with clear intent to defraud creditors;
- Blurring of boundaries between personal and corporate property;
- Absence of accounting and documentary separation between the holding and its members.
Legal Recommendations for Structuring a Compliant Holding
To ensure the legal effectiveness and resilience of the corporate structure, it is recommended that:
- Asset transfers be duly formalized, with proper registration and supporting documentation;
- Personal assets remain strictly segregated from those of the holding, including in practical day-to-day usage;
- The origin of assets and the rationale behind the structure be clearly established and documented;
- Informal or simulated usufruct arrangements be avoided, especially where they may evidence continued de facto control by the donor;
- In the event of pre-existing debts, the risks of future enforcement actions and potential findings of fraudulent conveyance be carefully assessed.
Final Considerations
The family holding remains a legitimate and recommended instrument for estate and succession planning. However, its use must be guided by transparency, legal consistency, and professional legal counsel. Failure to observe such standards may result in the judicial disregard of the structure and the personal liability of the heirs or beneficiaries.