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A Common-Law Marriage or a mere Date: in which kind of relationship do you want to be?

21Jun2018Jun21,2018
Private client

The issue of whether or not you are in a common-law marriage (União Estável) in Brazil revolves around the consequences that a common-law marriage has for estate planning, considering that common-law marriage is recognized by Brazilian law as a family. A relationship between two people is deemed to be a common-law marriage if the following four conditions are satisfied: the relationship is public, continuous, lasting and carried out with the intent of forming a family (the “Four Conditions”).

For legal purposes, in Brazil, two people having a relationship that meets the Four Conditions but fail to enter into a common-law marriage agreement are considered common-law marriage partners under the asset regime called community property (Comunhão Parcial). This regime generates the same effects in respect of the division of estate of the two individuals – either in the event of a divorce, or in the event of death of one of them – as if they had been married under the community property regime.

The Four Conditions do not require partners to have common children or to live together and there is no minimum time period established by law in order to entitle partners to claim recognition of a common-law marriage. Accordingly, common-law marriage is a relationship fully based on subjective criteria.

During the first decade after the effectiveness of the new Brazilian Civil Code (“Civil Code”), in 2003, the Brazilian courts took a broad view of common-law marriages, considering common-law marriages to exist in relationships that could, or should, be considered as merely dating. This jurisprudence caused insecurity for partners whose relationships were not superficial, but who were still only getting to know each other before deciding to execute a common-law marriage agreement or to get married.

Legal advisers, at that time, strongly recommended partners to execute a common-law marriage agreement, adopting the most suitable marriage regime for their relationship, which was usually the Full Conventional Separation of Assets (Separação Total). Obviously, raising the topic of marriage agreements between partners at an early stage of a relationship is quite sensitive, and therefore, not many people were willing to follow this advice, which resulted in undesirable consequences for the heirs of some of them.

However, during the last five years, court decisions have evolved and judges have been more flexible when analyzing a relationship by taking into account conditions, other than the Four Conditions, in order to decide whether or not a certain relationship may be deemed to be a common-law marriage. Among such additional conditions, the financial subordination between the partners is certainly one of the most important.

In this more recent scenario, the execution of a “Dating Agreement” (Contrato de Namoro) has emerged in Brazil as an option for couples. The Dating Agreement may be recognized by the courts as evidence that a couple may only wish to benefit from a relationship, which, despite being public, continuous and lasting, does not carry the willingness to form a family. It is, of course, essential that there is no financial support between the partners, because, in the event that one of the partners covers the monthly expenses of the other, the Dating Agreement would simply be disregarded and the judges may consider the couples to be in a common-law marriage.

The Dating Agreement has become an interesting alternative, especially when one of the partners, or both, is/are high net worth individual(s) and seek mechanisms for asset protection. The Dating Agreement is also a good alternative for foreigners who are living in Brazil, such as expats, who may wish to avoid misinterpretation of their relationship.

It must be made clear, however, that the enforcement of a Dating Agreement depends on the analysis of factual elements, at the judge’s discretion, because, for the time being, Dating Agreements are not recognized in our Civil Code or in any other law.

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