When heirs seek access to a crypto wallet, two levels meet that do not coincide: in civil law you inherit the deceased’s crypto assets like any other asset (§ 1922 BGB). In practice, however, you reach the assets only if you can obtain the private key, the recovery phrase, or an account with a provider that recognises you as legal successor. With a provider, the way generally leads through proof of inheritance and its review under the provider’s terms; with a self-custodied wallet only the key helps.
This article deals with the civil-law questions: who owns the assets, how you establish your identity towards platforms, what applies when there are several heirs, what you can do with self-custodied wallets and where the pitfalls lie. The tax side is covered only briefly; for detail see the article on taxation of cryptocurrency in an inheritance.
Legally It Belongs to the Heirs, in Practice the Key Decides
Under § 1922 (1) BGB, on death the deceased’s assets pass as a whole to the heirs (universal succession, Gesamtrechtsnachfolge). This includes crypto assets. There is no separate statutory rule for crypto assets in inheritance law; their classification as an asset is, according to the prevailing opinion, accepted, even though crypto assets are neither things within the meaning of § 90 BGB nor classic claims. What is decisive is the power of disposal: whoever knows the private key can dispose of the assets.
In 2018 the Federal Court of Justice (Bundesgerichtshof) decided, for a user account with a social network, that the contract with the provider passes to the heirs under § 1922 BGB (BGH, judgment of 12 July 2018, III ZR 183/17). In enforcement proceedings it later clarified that the heirs can demand access to the account and that a mere handover of data is not sufficient (BGH, decision of 27 August 2020, III ZB 30/20). Neither decision concerns a crypto account. They do show the principle, though: digital legal positions are heritable, and the provider cannot rely on strictly personal rights alone. For assets this applies all the more.
It follows that you acquire the status of heir by operation of law, without any application. Whether you also reach the assets depends on the type of custody.
Two Custody Models, Two Legal Positions
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| Model | Who has the power of disposal? | Access for heirs |
|---|---|---|
| Custody with an exchange or custodian (custodial) | the provider; the customer has a contract | through the provider, with proof of inheritance and review |
| Self-custody (hardware, software, paper) | solely whoever knows the key or recovery phrase | only with the key or phrase; a third party cannot help |
This difference determines what you can enforce in law. Against a provider you have claims under the contract that has passed to you. Against the blockchain nobody has a claim.
Access with an Exchange or Custodian
Someone who held crypto assets with a provider leaves the heirs a contract. The provider will generally demand a death certificate, proof of inheritance and identification, and carry out an identity check under the money laundering rules. Possible proofs of inheritance are:
- a certificate of inheritance (Erbschein, § 2353 BGB),
- a notarial will or an inheritance contract with the record of opening,
- where there is a foreign connection, a European Certificate of Succession under Art. 62 et seq. EuErbVO.
For banks, the Federal Court of Justice has decided that in dealings with consumers they may not generally demand a certificate of inheritance; a notarial will with the record of opening as a rule suffices (BGH, judgment of 8 October 2013, XI ZR 401/12). For an opened handwritten will, this may also apply, where sufficiently clear, according to the judgment of 5 April 2016 (XI ZR 440/15). Whether crypto platforms must measure up to this is not settled. Many providers insist in their terms on their own proofs, and with foreign providers also on certified translations or apostilles. These requirements take time; you can apply for a certificate of inheritance in parallel if the provider demands it.
If a provider refuses although the proof is available, a demand with a deadline and, if necessary, a lawsuit come into consideration. It must then be clarified which law and which court have jurisdiction. With providers having their seat abroad, their terms and a court of jurisdiction chosen there often apply; on the legal position on the spot you should consult a foreign adviser.
In regulatory terms, service providers for crypto assets in the EU are subject to Regulation (EU) 2023/1114 (MiCA), which regulates custody duties among other things. Whether and how a particular provider handles inheritance cases does not follow from this; contract and terms remain decisive.
Self-Custodied Wallets: Legal Claim Without Access
If the assets are in a hardware or software wallet, there is no contracting party you could claim against. You are the legal successor, nothing more. What you can do, legally and in practice:
- Establish existence. Without a hint from the deceased there is no central register. Clues come from account statements with transfers to exchanges, e-mails from providers, installed apps, tax documents and physical devices or notes with word lists. For bank accounts there is an account retrieval by the authorities; for self-custodied crypto assets there is no comparable procedure.
- Secure devices and documents. Take possession of devices, data carriers, slips of paper and password managers and record where you found what. Change nothing.
- No attempts on your own. Many hardware wallets lock or reset after several wrong PIN entries. Anyone who repeatedly guesses can lose access for good if the recovery phrase is not available.
- Have specialists check. IT forensic service providers can analyse data carriers. This is not successful in every case. Clarify confidentiality, costs and liability in writing before you hand over devices.
- Beware of advance payment. Providers who “guarantee recovery” against an advance are a known fraud pattern. Check references and do not pay large advances before success is in sight.
If the key remains untraceable, the assets can be practically lost. A court cannot enforce access, because there is no debtor.
Several Heirs: Joint Administration and Dispute Over the Key
If several persons inherit from the deceased, they form a community of heirs (Erbengemeinschaft). Under § 2038 (1) BGB the co-heirs administer the estate jointly. They can dispose of individual estate assets only jointly (§ 2040 (1) BGB). Each co-heir can take necessary preservation measures alone (§ 2038 (1) sentence 2 BGB).
Whether this includes a transfer of the crypto assets, for example to a secure custody when the key threatens to fall into the wrong hands, is not settled. A majority decision of the co-heirs is safer: the majority can decide on dispositions that correspond to proper administration (BGH, judgment of 11 November 2009, XII ZR 210/05). Going it alone should be limited to genuine emergencies, and the assets must on no account be moved to an address that only one person controls.
With crypto assets this is delicate, because whoever has the key can in fact dispose alone. This creates risks of abuse. Anyone who transfers assets to their own addresses without the consent of the other co-heirs exposes themselves to claims for surrender and damages and may also risk criminal consequences. Practical steps for safeguarding:
- Document the finding of the key in the presence of the co-heirs, ideally with a written record.
- Agree to which address or custody the assets are to be moved jointly, for example to an account with a regulated provider under joint signature.
- Have a co-heir who holds the key give you written information on whereabouts and use. There is no general right to information among co-heirs. If the co-heir has taken the assets for themselves or administered them for the community, however, they may be obliged to provide information under the rules on possession of the estate (§ 2027 BGB) or on management of another’s affairs (§§ 681, 666 BGB); if they already held a power of attorney during the deceased’s lifetime, also for the period before.
- Check whether an estate administration (Nachlasspflegschaft) under § 1960 BGB is needed if the heirs are unknown or it is uncertain who inherits. The particulars where there is a foreign connection are covered in the article Estate Administration with a Foreign Connection.
If the deceased appointed an executor (Testamentsvollstrecker), the executor administers the estate (§ 2205 BGB), and the heirs cannot dispose of the assets. An executor with technical understanding, or a lawyer as executor who brings in an IT specialist, can organise access in an orderly way. The partition of the community of heirs under § 2042 BGB is as a rule preceded by the question whether the assets are sold or divided in kind.
Precautions: What the Deceased Can Arrange
Most problems can be solved during one’s lifetime. An overview:
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| Measure | Effect | To note |
|---|---|---|
| Inventory of wallets and providers | Heirs know where to look | keep separate from the keys |
| Key or recovery phrase not in the will | protects against third-party readers | the will is opened by the probate court and is accessible to several people |
| Reference in the will to the existence and location of the access data | findability | secure the access data itself separately |
| Power of attorney beyond death (§§ 168 sentence 1, 672 sentence 1 BGB) | the attorney can act towards providers | some providers do not recognise it, regulate the scope precisely |
| Precautionary power of attorney (Vorsorgevollmacht) | access in case of incapacity during lifetime | separate from succession |
| Executorship | orderly handling by an experienced person | set selection and remuneration |
| Multi-signature or split keys | no individual can dispose alone | technical support needed |
Notaries and lawyers can keep documents. Clarify scope, liability and conditions for release in advance. Document anew after every change, otherwise an outdated inventory leads astray. On the precautionary power of attorney for residence abroad see Precautionary Power of Attorney When Living Abroad.
Deadlines and Duties of the Heirs
- Disclaimer. The period is six weeks from knowledge of the devolution and of the ground for the call (§ 1944 (1) BGB), six months if the deceased had their last domicile only abroad or the heir is abroad when the period begins (§ 1944 (3) BGB). Acts that go beyond securing, such as selling inherited coins, can be taken as acceptance. Check beforehand whether the estate may be over-indebted. The article Disclaimer Period with a Foreign Connection covers foreign cases.
- Notification to the tax office. Under § 30 ErbStG a taxable acquisition must be notified within three months of knowledge of the devolution. Crypto assets form part of the acquisition. Valuation, allowances and income tax on sale are in the article on taxation of cryptocurrency in an inheritance.
- Price risk. The value on the valuation date determines the tax, even if the price falls later. Anyone who gains access only late bears the price risk nonetheless.
Foreign Connection
A foreign connection exists if the deceased lived abroad, had accounts with foreign providers or heirs live abroad. Within the scope of the EuErbVO, the applicable succession law is in principle determined by the deceased’s habitual residence at death, unless a choice of law was made; the basics are in the article International Inheritance Law on Emigration. The law governing succession says who inherits. How a foreign provider identifies heirs is governed by its terms and the law applicable to it. You should involve a local adviser on this.
Typical Mistakes of Testators and Heirs
- Storing access data in the will or in the cloud. Anyone who puts the recovery phrase in the will or as a photo in online storage creates opportunities for access by third parties.
- Going it alone with several heirs. Access without the others’ knowledge causes disputes and can give rise to claims and criminal-liability risks.
- Trying out devices. Repeated wrong entries or resetting block the way.
- Overlooking providers. Anyone who looks only for wallets overlooks exchange accounts or payment services.
Conclusion
The heirs become holders of the crypto assets as soon as the succession occurs. Whether they reach the assets depends on the custody: with providers the way leads through proof of inheritance and review, with self-custody solely through the key. With several heirs a joint, documented approach is needed. Anyone who makes provision separates the inventory from the access data, appoints an experienced person of trust and keeps the documentation up to date. Tax duties and deadlines run regardless of whether access succeeds.
Frequently Asked Questions
Do crypto assets form part of the inheritance?
Yes. They pass to the heirs as part of the assets under § 1922 BGB. Whether the heirs can actually access them depends on whether they have the key or the provider recognises them as legal successors.
Do I need a certificate of inheritance for the exchange?
That depends on the provider and its terms. For banks the BGH has decided that in dealings with consumers they may not generally demand a certificate of inheritance; a notarial will with the record of opening as a rule suffices. Whether the same applies to crypto platforms is not settled; clarify the requirements in advance.
What if I find only a hardware wallet without a recovery phrase?
Change nothing and do not try to guess the PIN. Look for the recovery phrase in documents, safe deposit box and notary custody, and have the approach checked by a specialist.
May a co-heir transfer the crypto assets alone?
No, as a rule not. Exceptions come into consideration only for necessary preservation measures (§ 2038 (1) sentence 2 BGB). Dispositions of estate assets require the participation of all co-heirs, unless an executor may act alone.
Should I write the recovery phrase into the will?
No. The will is opened and is not secret. State in the will only the reference to where and with whom the access data is deposited.
Attorney Dr. Johannes Fiala and the law firm, with a focus on international inheritance law, tax law and asset protection in Munich, advise testators and heirs of digital assets on succession planning and on access after the succession, from provision in the will through identification towards platforms to coordination with advisers abroad. Dr. Fiala has published extensively on questions of emigration and asset protection. Contact the firm without obligation to discuss your individual situation in an initial consultation.
