Crypto Inheritance in Germany: What Happens to Your Bitcoin When You Die? (2026)

Photo: Karsten Ratzke / Wikimedia Commons, CC0

Crypto inheritance in Germany is a topic most Bitcoin owners avoid until it is too late. Legally, your coins pass to your heirs like any other asset. The practical side is the problem. If nobody knows which exchange you used, or where your hardware wallet and recovery phrase are, your family may never reach the money at all. This beginner guide explains how heirs claim crypto, how it is taxed in Germany, and what you can prepare today.

Is crypto part of your estate in Germany?

Yes. Under German law, everything you own passes to your heirs as a whole when you die (universal succession, § 1922 BGB). That includes Bitcoin and other crypto-assets, whether they sit on an exchange or in your own wallet.

Germany's highest civil court, the Bundesgerichtshof (BGH), confirmed in a landmark ruling on 12 July 2018 (III ZR 183/17) that a user contract for an online account generally passes to the heirs by universal succession, and that heirs can demand access to the account. The case was about a social network, but it is the key reference for "digital inheritance" in Germany.

What the law cannot do is recreate a private key: nobody can order the Bitcoin network to move coins from a wallet whose recovery phrase is lost.

Crypto inheritance in Germany: exchange account vs. own wallet

How heirs get access depends almost entirely on where the coins are held.

Where the crypto is held	What heirs need	Main risk
Account at an exchange or crypto app	Death certificate, proof of inheritance (Erbschein or opened notarial will), their own ID, and a claim to the provider	Heirs do not know the account exists
Hardware or software wallet (self-custody)	The device and its PIN, or the recovery phrase (seed phrase) and any passphrase	Seed phrase lost: coins are gone for good
Bitcoin ETP in a bank or broker securities account	The normal estate process of the bank or broker	Usually low; handled like other securities

Overview for orientation only; each provider sets its own claim process.

If the coins are on an exchange

Regulated exchanges have a process for deceased clients, similar to a bank. Kraken, for example, says it does not offer beneficiary designations; instead, the estate representative submits a claim with:

a complete colour image of the official death certificate (certificates from funeral homes are not accepted),
a document showing who is the legal representative of the estate,
a valid government photo ID of that person, and
a signed, dated letter confirming the death.

In Germany, the usual proof of who inherits is an Erbschein (certificate of inheritance) from the probate court (Nachlassgericht at the Amtsgericht). According to the BGH (XI ZR 440/15), heirs are not always obliged to present an Erbschein: a notarial will, opened by the court and presented with the court's opening record (Eröffnungsprotokoll), can also serve as proof. Ask the provider early what it accepts.

If the coins are in your own wallet

With self-custody there is no company to call: whoever has the recovery phrase controls the coins, so your heirs need clear, safe instructions. Our guide on how to check a Bitcoin wallet backup helps you make sure the backup actually works before anyone has to rely on it.

How inherited crypto is taxed in Germany

Two different taxes can matter.

1. Inheritance tax (Erbschaftsteuer)

Inherited crypto counts towards the taxable inheritance, valued at its market value on the date of death. A later price crash does not change it. Personal tax-free allowances under § 16 ErbStG are generous for close family:

Spouse or registered partner: €500,000
Children (and children of a deceased child): €400,000
Grandchildren: €200,000
Other persons in tax class I (e.g. parents inheriting): €100,000
Siblings, nieces, nephews and other relatives in class II, and all other heirs: €20,000

Above the allowance, rates range from 7% to 30% in tax class I, 15% to 43% in class II and 30% to 50% in class III, according to the federal government's service portal. Gifts from the same person within ten years are added together (§ 14 ErbStG).

Heirs must report a taxable inheritance to the inheritance tax office in writing within three months of learning about it (§ 30 ErbStG). Banks and other firms that professionally hold other people's assets must report the deceased's holdings to the tax office themselves (§ 33 ErbStG). A hardware wallet in a drawer reports nothing, so heirs should list self-custodied coins in their own report.

2. Income tax when heirs sell

Inheriting Bitcoin is not a sale, so it does not trigger income tax. What matters is a later sale. Under § 23(1) sentence 3 EStG, for assets received free of charge, the purchase by the previous owner is attributed to the new owner. The Federal Ministry of Finance repeats this in its crypto tax letter of 6 March 2025: in an unpaid acquisition, the acquisition by the legal predecessor is decisive.

In practice, the heir takes over the deceased's purchase date and purchase price:

If the deceased held the coins for more than one year, the heir can usually sell them free of income tax.
If the year has not yet passed, the remaining period continues for the heir; a sale before it ends is taxable, calculated with the original purchase price.

This is the same one-year rule explained in our guide to Bitcoin taxes in Germany and the €1,000 limit. The catch: heirs must be able to prove the original purchase dates, so exchange statements and transaction histories are worth keeping. If a taxable sale happens, it goes on the tax return as described in our Anlage SO guide for crypto.

How to prepare: a simple crypto inheritance checklist

A few calm steps make things much easier for your family:

Make an inventory. List every exchange, app, broker and wallet you use, with the account email, but no passwords or seed phrases.
Keep proof of purchase. Export transaction histories once a year so heirs can show purchase dates for the one-year rule.
Decide how the recovery phrase reaches your heirs. Common options are a sealed envelope in a safe deposit box, or instructions held by a trusted person or notary. Never put a seed phrase into a will, which is opened and read by the court and the heirs.
Write a will. Without one, the statutory order of inheritance applies. A notarial will can make it easier for heirs to prove who inherits.
Leave plain-language instructions. Explain where the hardware wallet is and that nobody should ever type the seed phrase into a website.
Review it every year. Accounts and providers change.

FAQ

Do I pay income tax when I inherit Bitcoin in Germany?
Not for the inheritance itself. Income tax can apply only if you sell within one year of the deceased's original purchase date. Inheritance tax applies separately if the total inheritance is above your personal allowance.

Can heirs recover Bitcoin without the seed phrase?
If the coins are on an exchange, yes, through the provider's estate process. If they are in a self-custody wallet and both the device access and the recovery phrase are lost, there is no way to recover them.

Is an Erbschein always required for a crypto exchange?
Not always. Under German case law, an opened notarial will with the court's opening record can also prove who inherits, but each provider decides which documents it accepts, so ask early.

Important disclaimer

This article is for general information only and is not financial, legal or tax advice. Inheritance and tax rules depend on your personal situation and can change. For a will, an estate plan or a concrete inheritance case, talk to a notary, a lawyer specialising in inheritance law or a tax adviser (Steuerberater).

Bottom line

Crypto inheritance in Germany follows the normal rules: the coins belong to the estate, inheritance tax uses their value on the date of death, and heirs take over the original purchase date for the one-year rule. The real danger is practical, not legal. If your family does not know where your crypto is, or cannot reach the recovery phrase, the law cannot help them. An inventory, saved transaction histories and a safe plan for your seed phrase are what your heirs will need most.

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Sources

Advice Me publishes general information only. Always check official sources and your own situation before making financial decisions.

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