It may say counterintuitive, but you might find yourself wanting to give up your right to an inheritance. As with most things in Brazil, it usually boils down to taxes. But once you do it, there’s no going back. And if you don’t do it correctly, you could get hit with more taxes than you expected.

Accepting an inheritance is fairly straightforward and is generally done by written declaration. Renouncing an inheritance - that is formally declining to receive your part of an estate - requires signing a court document or a public instrument with a notary. In addition, you must choose the type of renunciation you want.

There are two ways to renounce an inheritance: abdicativa and translativa. Most importantly, the type you choose determines who the estate will go to and who (if anyone) will pay taxes on it.

Abdicativa is what we generally think of when we refer to giving up a right to something. It means you won’t receive the inheritance and any assets remain with the estate for distribution among the other heirs. Hence, you also won’t owe any estate tax.

Translativa means you don’t want the inheritance and prefer to appoint a third party to receive it. In this case, the assets pass through you and then go to the beneficiary you appointed. However, from a tax perspective, it’s as if you received your part of the estate and subsequently gifted it away. So you’ll get stuck paying both estate tax and gift tax.

Sometimes even saying “no” requires planning.