From a certain age onwards, it is natural that fortunate people who have managed to accumulate a good wealth are interested in knowing the alternatives for succession of the estate to the heirs, ensuring that their wishes are respected, within the legal limits, and reducing the transmission costs, whenever possible.
Age is a trigger for people to start thinking about the subject and it is also a trigger for commercial agents to offer pension plans presenting arguments related to the exclusive characteristics of the product, such as not participating in the inventory and being exempt from the incidence of Tax on Cause Mortis Transmission and Donations (ITCMD).
Today I bring the case of ML, a reader of Sheetwho has been repeatedly contacted by a commercial agent trying to convince her to apply her elderly mother’s resources to a VGBL.
His arguments focus on the product he wants to sell: not participating in the inventory and being exempt from the incidence of the ITCMD; the numbers: estimated value of R$ 60 thousand in tax and high cost of the lawyer; and support the recommendation to invest 70% of resources in VGBL.
The prevailing understanding in jurisprudence is that a VGBL should not be considered an inheritance. Thus, it is not included in the inventory of assets, thus being exempt from the incidence of ITCMD (4% in the state of SP). Is that enough to recommend allocating almost all available money? Not.
Age, although important, is not decisive for the offer and purchase of pension plans aimed at estate succession. There are other aspects to consider.
Let’s broaden the look, see beyond the numbers and the product, get to know the person, the owner of the money and her family context.
ML’s mother is 86 years old and suffers from Alzheimer’s disease. The money in question represents all her assets and is invested in a fixed income investment with daily liquidity.
The children, future heirs, have no problem paying the tax, despite the high value, and are in no hurry, they can wait for the inventory to end to have access to the money, if there is still any. The cost of attorney does not apply to her case, considering that one of the children is a lawyer.
I want to expand the list of arguments and introduce new aspects so that the reflection and decision-making of ML and his brothers is the most appropriate.
The pension plan administration fee, an annual percentage of capital, may equal or exceed the cost of the ITCMD that is intended to be avoided. And I’m assuming there won’t be any other charges like loading fee or exit fee that make the product even more expensive.
We cannot forget the incidence of Income Tax on income. Considering advanced age and the need for liquidity, the plan would be contracted with the tax regime that adopts the progressive rate table. The beneficiary of the plan will pay 27.5% of IR, when he could pay only 15% or nothing, if he opted for tax-exempt products.
The product’s liquidity is limited, it only admits redemptions every 60 days. Considering the matriarch’s health condition and possible need for immediate resources, the VGBL is not suitable for those who need ample liquidity.
After evaluating all these aspects, the children concluded that it was more appropriate to keep the money in liquid investments, exempt from IR, and to pay the ITCMD at the time of transfer of the assets.
wise decision. It is often better to ignore financial aspects, such as the cost of inventory and inheritance tax, and give priority to aspects that provide everyone with safety, comfort and well-being.
May the money remain in the service of ML’s mother as long as she lives.
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
