Crypto Inheritance

Under section 1922 of the Bürgerliches Gesetzbuch (BGB), a deceased person's entire estate passes to the heirs as a whole at the moment of death, crypto assets included. There is no separate German law written for crypto inheritance; the general principle of universal succession applies whether the estate holds a house, a securities account or a bitcoin wallet. The legal position has been settled for years, which makes the practical side, actually getting access to the assets, the real problem heirs face.

A private key or seed phrase is what actually controls a self-custodied crypto wallet, and unlike a bank, no institution can reset it or prove ownership on a court order alone. If the deceased stored the key on a piece of paper, a hardware wallet or a password manager and told no one where to find it, the coins stay in the wallet forever, visible on the blockchain but permanently out of reach. This differs sharply from assets held at a licensed exchange: there, the heir inherits a contractual claim against the exchange, the same way they would inherit a claim against a bank, and the exchange's own identity and succession process, not a private key, governs access.

Crypto holdings count as "other assets" under section 12 of the Erbschaftsteuer- und Schenkungsteuergesetz (ErbStG), valued at their market value on the date of death. The usual personal allowances apply by relationship to the deceased, for example 400,000 euros for a child, and any inheritance or gift above the allowance has to be reported to the tax office within three months, the same deadline that applies to any other inherited asset. A crypto position that grew heavily in value since it was bought can push an estate well past the allowance even when the original investment was modest, so heirs need the valuation done promptly, not deferred until the assets are eventually sold.

The practical fix is a documented, secure plan that survives the owner: a written record of which wallets and exchange accounts exist, where the keys or recovery phrases are physically stored, and instructions for a trusted executor or notary. German estate planners increasingly recommend depositing this information with a notary or in a sealed document referenced in the will. A key that exists only as a memory disappears with the person who held it. Multi-signature wallets, which require more than one key to move funds, offer another route: an owner can split control between themselves and an heir in advance, so access does not depend on finding a single hidden key after death.

Crypto inheritance is part of the wider estate and wealth planning conversation the Finance Loop Frankfurt events bring to compliance officers, wealth managers and lawyers, alongside KYC and custody topics that shape how crypto assets are held in the first place. The topic sits in the Finance Loop Risk & Compliance track, next to source of funds and crypto litigation.

Not for a self-custodied wallet. If nobody knows the private key or seed phrase, the coins stay on the blockchain but are permanently unreachable, since no institution can reset the key or override it by court order. This is why estate planners recommend recording key locations in a place heirs can find, such as with a notary.

Crypto counts as an inheritable asset under the ErbStG, valued at its market price on the date of death, and taxed above the usual personal allowances by relationship to the deceased. The inheritance has to be reported to the tax office within three months.

Document every wallet and exchange account, store keys or recovery phrases somewhere a trusted executor or notary can find them, and consider a multi-signature setup that splits control between the owner and an heir in advance. A recovery plan must remain usable when the person who knows the password can no longer provide it.