Allowable Expenses, Greek Property and Charities

Trusts Discussion
1

I am administering an estate and as briefly as possible the facts are that there is a will in England which has been proved and appoints professional executors and the residuary beneficiaries are charities (the will is not limited to England and Wales). The Deceased died March 2015.

There is a share of land in Corfu which the Deceased intended to gift away to extended family members (‘the Transferees’) during her lifetime, by appointing a Power of Attorney in Greece and entering into Greek pre-contracts, intending for a final legal transfer which was unfortunately not perfected before death. There are no further assets in Corfu.

I have no experience of Greek probate or property so I am relying heavily on the expertise of the Greek lawyer employed by the deceased and her family.

I am told by the Greek lawyer that:

  1. The pre-contract that was entered into is legally valid and binding on the estate, and that the only option for the estate is to ‘perfect the gift’ by completing the contract. There are two options to perfect the gift, either the professional executors are to grant a power of attorney to the Greek lawyer to complete the matter, or the Transferees can perfect the contract themselves, but seemingly this is complex and may involve the Greek courts and not the preferred option. I am being pushed by the Greek lawyer towards the Power of Attorney option.

  2. The legal fees are all the responsibility of the estate in England, currently standing at some 12,000 Euros. I am therefore concerned to ensure that these are the truly allowable expenses of the estate, I am told that they are allowable, and that the Transferees would claim against the estate for costs if the executors do not settle the fees. If the Transferees had to take court action, then these fees would also become costs of the estate.

My concerns are:

a) the Greek lawyer has on more than one occasion alluded to the fact that the system in Greece is ‘flexible’, and it is only ‘right’ that the Transferees receive the property, and the charities ‘will just have to understand’. I have explained that executors in England do not have flexibility to make decisions. If we grant the Power of Attorney to allow the transaction to proceed, are the executors giving effect to the true legal position or what the lawyer thinks is best for the family? The Greek lawyer does seem to be acting on all sides of the transaction in Greece.

It would seem that the English will is accepted in Greece, on the basis that the appointment by the executors of an Attorney would be valid. Therefore I do not believe that it is intended that the usual rules relating to immovable property and the intestacy rules of the jurisdiction or the new succession rules are being relied upon in any way.

b) the costs are high, and the residuary estate is very modest and the charities are not currently happy to employ another Greek solicitor for a second opinion at further cost. There are no other assets than those in the UK, and as the will is silent on the matter, I believe that the liabilities relating to the Greek estate will have to be settled from the English assets.

c) If I provide the charities with sufficient information, explaining that we are relying entirely on the advice of the Greek lawyer; that they (the charities) do not wish for us to obtain a second opinion and detail the proposed course of action, does this sufficiently protect the professional executors against future actions by the charities?

Any comments or thoughts would be appreciated. In addition, any STEP member with a recommendation for a specialist probate lawyer in Corfu (or Greece) would be welcomed.

C Horowitz
Askews

2

It seems to me that the Greek lawyers involved being retained by the family may well have regard only to their clients’ interests, and not to those of the charity beneficiaries.

If the charity beneficiaries are against instructing lawyers conversant with Greek Law to advise the executors, I suggest the executors obtain specific instructions from the charities o how they wish the executors to proceed with regard to the Greek estate and that the charities enter into an indemnity absolving the executors from responsibility/liability for complying with such instruction. The adoption of this route may cause the charities to review their current stand and they might decide the estate should obtain its own advice.

Admittedly, there is a risk that if the charities agree the executors should obtain advice, such advice will conflict with that from the family’s lawyers and lead to an escalation of the situation. However, without independent advice, or an indemnity from the beneficiaries, the executor may be horribly exposed to a claim if it should just go ahead on the basis that the beneficiaries don’t want to “waste” money on legal advice.

Paul Saunders

3

I agree with Paul Saunders that the charitable beneficiaries must be involved in the decision making process on this and that the executors should recommend the obtaining of impartial advice beforehand. That advice should also comment on Greek succession law and what bearing that might have if the pre-contract does not turn out to be enforceable.

With regard to the expenses, that must surely depend on the contract with the Greek lawyers and who entered into it. If that was the deceased then the expenses to the date of death must be a liability of the estate. If the pre-contract is enforceable then it seems to me that the executors should not pay any further costs out of the UK estate.

The STEP Directory and Yearbook lists 1 STEP member in Greece but there may be more in Cyprus.

Graeme Lindop
Coles Miller Solicitors LLP