You are doing your US estate planning with your favorite local lawyer Bob Smith who is known in your local County to do estate work and planning. Being a good US lawyer he prepares a Will; a Living Will; Durable Powers of Attorney and for tax or minors'protection or other reasons ,creates a testamentary trust for all your real estate.The US Will and Trust are selective in who they leave property to including several pieces of Greek real estate that are placed,along with certain US property, in the Trust. Under penalty of perjury, and if you want the wishes of the deceased carried out, you must follow the process to have the US Will recognized and given effect in Greece. (I will talk about how this is done in a future blog entry). The problem is that Greek law does not recognize Trusts or Trustees. They will look to identify the individual heirs ,not only for purposes of the Greek probate process but also for computation of the Greek Inheritance Tax Declarations. Greek Courts may not recognize the US Trust as a legal person and therefore,technically ,title may not be able to be placed in the US Trust. Worse yet, Greek Inheritance taxes are based on the degree/level of family relationship- with spousal and parent child inheritance bequests taxed at the lowest rate and unrelated persons or entities taxed at the highest rate. This creates the potential for paying ten times or more the inheritance tax otherwise due if the Greek property was left directly to the heirs. In such cases, you should consult with our firm to discuss how the testamentary disposition of the Greek and US assets and properties can be planned and drafted to avoid these issues. This problem is a textbook problem which arises between common law legal systems and code law systems. I will also talk about this general issue in a future blog-namely that Greece does not draw the common law distinction between property law and contract law -among other key comparative law differences between USA and Greek law.
Greek bank accounts or Greek real estate??The IRS may come calling!.
Most American residents with Greek bank accounts and or Greek real estate have been calling us about the ton of new Greek tax filings and regulations(many of which are described in our Firms website.Believe me when I tell you that hundreds are calling about the Greek 'HARATSI').I will be talking about these in future entries in this Blog.However most are not aware that new US regulations involving Form FBAR require all Greek bank accounts to be annually declared to the IRS if they exceed the amount of $10,000. This declaration must be made by owners or those who control the accounts. The penalties for non complience are severe. It irellevant that the money is not in a US affiliated bank,is in Euros or has not been wired or transferred to the US.We have been busy filing these for our clients. It also bears repeating that the US will tax US residents and or citizens on worldwide income. That means that if you collect rents in Greece you must declare them in the US. If you sold gifted, bought or inherited property in Greece you must declare the capital gain in the US. If you collect interest in Greece on accounts or omologa(bonds) you must declare it in the US in that tax year. It doesnt matter if you declared and paid income tax on these in Greece.The Greek Tax Authority (Athens Branch for foreign residents) will tax al Greek source income for US residents. But you must also DEclare this Greek source income on the tax return n the year it is realzed in Greece.Since we not only have Greek tax attorneys on our team--we have also US tax lawyers with LLM'sin tax and accounting, we can amend and file your IRS filings in the US if you have neglected to do this. There are two tricky parts:One is the computation of the IRS Foreign Tax Credit against Greek tax paid and the exemptions and deductions allowed. These need to be proven by Greek documents--but thankfully, we have two Greek offices staffed with lawyers who speak both languages to do this.The second tricky part is,if the property sold is inherited property, how do you compute the basis--ie the income on the sale. Without going into technical detail here, what we have to do is go back and calculate the Fair Market Value of the real estate inheritance when your relative who left it to you died and add to that all expenses ,costs, improvements etc.. .This gets complex not only because we have to go years back but value in those days may have been in Drachmas.A brief related issue: You say:"Mr Kounoupis ,thank you for giving me a headache as to all these US and Greek legal filings but, when someone just gifts to me a property in Greece(just like you advised my parents to do a goniki Parohi to me) do i still have any US tax reporting obligations? After all there is no income gained yet?" The answere in my view is yes-I think you still have to file IRS Form 3520 with regard to Receipt of Foreign Gifts. In a future blog entry i will talk about information and documents needed for the US ESTATE TAX FORM WHEN THERE ARE PROBATE PROCEEDINGS AND ASSETS BOTH IN THE US AND GREECE.
Purpose of this Blog:Practical,updated, US-Greek law Issues ,developments and advice
The purpose of this Blog is to provide some of my practical knowledge and experience of over 25 year practicing US-Greek law and having been licensed as a lawyer in both countries.The purpose of this Blog is not to write technical legal articles-although i will regularly refference important US -Greek legal developments by name or legal statute. If anyone needs more technical legal refferences please reffer to the Articles section of our website(which is cross linked with this Blog)You can also call me for a free initial consult on any particular questions. I can assure you, the real life, unbelievable examples of what i have experienced- and continue to experience in my daily practice, will inform,suprise and maybe shock you. Stay tuned!
Dont throw away your Greek inheritance.
Your aunt dies in Chicago.She went back and forth from Greece during her life. She never married. You never forgot her name day though,feeling sorry that she lived alone in a modest apartment.A friend of the family tells you in Church that she may have had some real esate and a bank account in Greece. You just dont know. The next day after the funeral, you get a call from your Greek cousins from Patras saying that they will send you a Greek paper to sign,nothing important so,you know,they can take care of some legal technicalities. Since time is of the essence,you have to do this right away! What do you do?
Greek financial woes and the Greek legal system
The hugely inefficient Greek legal system is a root cause of its financial crisis. Delays, corruption, inconsistency and fear impede economic development and investment.
