Digital assets like Bitcoin, Ethereum, and other cryptocurrencies have become established in the financial world. More and more people are consciously investing in this asset class. Consequently, interest is growing in how crypto assets can be sensibly passed on in inheritance cases. Those who plan ahead can avoid unnecessary conflicts and losses.
1. Cryptocurrencies are part of the estate.
From a legal perspective, digital assets are considered inheritable property. They are part of the estate and are subject to the same legal regulations as traditional investments, such as savings accounts or stocks.
Specifically, this means that heirs are entitled to the release of the crypto assets, provided they are entitled to do so through inheritance or a will.
The real challenge lies in access.
2. The real challenge lies in access.
While the legal classification is usually clear, practical implementation often presents difficulties. Crypto assets are managed in wallets that can only be accessed with credentials such as private keys or seed phrases.
Without access, no access is possible.
If this data is missing or cannot be found, the cryptocurrencies are effectively lost. Therefore, it is essential that testators:
- clearly document their crypto holdings and
- Securely store the access information locations and
- Specify who may access it in the event of death.
Estate planning requires more than a standard will.
3. Estate planning requires more than a standard will.
A standard will often falls short when it comes to digital assets. It’s advisable to supplement this with specific instructions for managing and transferring crypto assets. The following points should be considered:
- detailed description of the assets (e.g. wallets, exchanges),
- secure storage or transfer of access data and
- Protection against misuse through encryption and
- Clear determination of the heirs, taking tax aspects into account.
4. Inheritance tax also applies to cryptocurrencies.
Like other assets, digital assets are subject to inheritance tax if they are part of the estate. The decisive factor is the market value at the time of death. Due to the high volatility of digital assets, disputes can arise. Seeking tax advice early on is recommended to avoid problems with the tax authorities.
5. Early planning protects the digital legacy.
Anyone who owns cryptocurrencies should think about estate planning early on. Well-thought-out arrangements – ideally with the support of an experienced lawyer specializing in inheritance and tax law – ensure that digital assets are not lost, but remain within the family.
The law firm Cocron GmbH & Co. KG provides nationwide advice on succession planning for cryptocurrencies and digital assets.
