An inheritance without bank statements, without securities certificates, and without a bank advisor: This is what digital assets look like when Bitcoin, Ether, or stablecoins are involved. The assets exist, but no one knows where. For heirs, law firms, estate administrators, and executors, the search becomes the real challenge. This article shows what constitutes a digital estate, where crypto assets are typically located, and how forensic analysis can prove holdings and value them as of a specific date.
What constitutes a digital legacy?
Digital assets encompass all legal rights that a person leaves behind in digital form. Upon death, these pass to the heirs by way of universal succession (§ 1922 of the German Civil Code). The Federal Court of Justice confirmed this in 2018 for an account on a social network (judgment of July 12, 2018, case no. III ZR 183/17) and clarified in 2020 that heirs must receive actual access to the account, not just a copy of the data (decision of August 27, 2020, case no. III ZB 30/20).
Accounts, contracts and data
Digital assets include, among other things:
- Communication: Email inboxes, messengers, social networks
- Payment services: Online banking, payment apps, neobrokers
- Contracts: Subscriptions, cloud storage, domains, licenses
- Assets: Platform balances, crypto assets, NFTs
Crypto assets as a special case
For bank accounts, a certificate of inheritance is helpful. The bank knows the customer and pays out to the heirs. For privately held crypto assets, there is no such authority. Whoever possesses the private key or seed phrase can access the assets. Those who don't possess them cannot, even with a certificate of inheritance. Inheritance law is clear; its practical enforcement depends on access.
Why crypto assets often go undiscovered in an estate
Many testators have not disclosed their assets to anyone. The reasons are mundane: a desire for security, a lack of estate planning, or simply the thought that there's still time.
This creates a time constraint for those involved. The deadline for disclaiming an inheritance is generally six weeks from the date of knowledge of the death (§ 1944 BGB). Within this period, it should be clear whether the estate has any value. Undiscovered crypto assets can distort this assessment in either direction.
In addition, there are obligations towards third parties. Those entitled to a compulsory share of the inheritance have a right to information about the assets of the estate (§ 2314 German Civil Code). Executors must draw up an inventory of the estate (§ 2215 German Civil Code). An inventory that omits wallets is incomplete and contestable.
Where are Bitcoin and other cryptocurrencies stored? Typical storage options.
The form of storage determines what traces exist and who can provide information.
Crypto exchanges and custodians
If the assets are held with an exchange or a crypto custodian, a customer account exists with identity verification. Heirs can prove their identity with a death certificate and proof of inheritance. Regulated providers in the EU have procedures for this; with providers in third countries, the process is longer and more formal.
Hardware wallets and seed phrases
In self-storage, the keys are stored on a device or on paper. The device itself is simply the keyring. The crucial element is the seed phrase, usually consisting of 12 or 24 words. Our article on [topic missing] illustrates the risks associated with sharing such devices. Handover of hardware wallets.
Software wallets and DeFi
Wallet apps on smartphones, browser extensions, and positions in decentralized protocols leave no mail or bank statements. Staking-Holdings, liquidity pools and loaned tokens do not appear in any classic asset overview.
Tracing the trail: Clues to crypto assets in the estate
Even those who haven't documented anything leave traces. In practice, these sources most often lead to the desired result:
- Bank statements: Transfers to cryptocurrency exchanges or payment service providers, often with a conspicuous purpose of payment.
- Email inbox: Registrations, deposit confirmations, security alerts from trading platforms
- Devices: Wallet apps, browser extensions, authenticator apps, password managers
- Documents: Slips of paper with word lists, metal plates, USB-like devices in a safe or bank safe deposit box
- Tax documents: Schedule SO, reports from tax tools, correspondence with the tax advisor
Important for everyone involved: Do not reset devices, do not sell them, and do not delete any apps. An old smartphone in a drawer could be your only access to a substantial fortune.
Forensic analysis: Determining and evaluating inventories as of the reference date
Once an address, transaction, or stock exchange account is known, the real work begins. The blockchain is public and immutable. From this, it's possible to reconstruct which assets belonged to the deceased and where they went. We describe the methods used in the article on the... Crypto forensics methods.
What an analysis achieves
- Assignment: Based on known addresses, related wallets are identified.
- Completeness: Outflows to other exchanges, wallets, or protocols reveal additional holdings.
- Key date valuation: Inventory and market value are determined as of the date of death and documented in a traceable manner.
- Movements following inheritance: Transactions after the date of death reveal whether someone with key access has had any transactions.
The last point is often decisive in cases involving communities of heirs and disputes over compulsory shares. Anyone who moves assets after the inheritance has been passed leaves a permanently verifiable trace. Our article explains how such evidence can be used in legal proceedings. Blockchain evidence in court.
What an analysis cannot do
Forensic analysis verifies the existence of data. It does not replace a private key. If the seed phrase is irretrievably lost, the data remains visible but inaccessible. This finding also carries weight, for example, for estate valuation or in dealings with the tax authorities.
Inheritance tax and income tax: What heirs must prove
Cryptocurrency assets are subject to inheritance tax. The decisive factor is the value on the date of death (§§ 9, 11 German Inheritance Tax Act). With volatile prices, the choice of time and price source can make a significant difference. A documented valuation on the relevant date provides a reliable basis for this.
For income tax purposes, heirs assume the position of the deceased. The acquisition date and costs are attributed to them (§ 23 para. 1 sentence 3 EStG). Without a transaction history, neither the Holding period Determine the capital gain accurately. More on this in the article on... Legally compliant documentation for crypto taxes.
Two points deserve special attention:
- Contaminated sites: If heirs discover that the deceased did not declare profits, they have a duty to correct the declaration (§ 153 para. 1 sentence 2 AO).
- Reporting obligations: The Crypto Asset Tax Transparency Act has been in effect since January 1, 2026. Providers are required to report their users' transactions to the Federal Central Tax Office. This means that previously undisclosed cryptocurrency holdings will also be visible in inheritance cases. Further details can be found in our article on... DAC8 and KStTG.
We are neither lawyers nor tax advisors. The legal and tax assessment is the responsibility of the law firm and tax advisor. Our forensic analysis provides the factual basis for this.
Crypto estate management in practice: Law firms, estate administrators, executors
For professional estate managers, digital assets are a liability issue. Anyone who needs to secure and record assets should actively examine cryptocurrencies and document the results, even if they are negative.
Typical requests we receive:
- Inventory: Examination of documents and devices for indications of crypto assets
- Appraise: Documentation and valuation of assets as of the cut-off date for estate inventory, settlement or tax office
- Disputes: Analysis of outflows in cases of suspected concealed or misappropriated assets
- Request for information: Preparation of data for inquiries to stock exchanges and custodians
The question is similar to the issue of asset disclosure in family law, which we discussed in the article on Crypto assets in divorce proceedings Describe. An overview of the collaboration can be found at Financial forensics for lawyers.
A warning for heirs: After a death, it is not uncommon for alleged service providers to contact you, demanding upfront payment to recover lost wallets. Never disclose your seed phrase or make any advance payments to unknown providers.
Managing your digital legacy: Planning ahead during your lifetime
The best estate investigation is the one that isn't needed. Anyone holding crypto assets should note three things:
- Inventory list: Which exchanges, which wallets, which devices exist?
- Access regulations: Where seed phrases and passwords are stored, for example in a bank safe deposit box or in notarial custody.
- Orders: Will and power of attorney extending beyond death, which expressly cover the digital estate
The seed phrase is not included in the will itself. It is announced to all parties involved at the reading of the will.
Conclusion: Digital assets require evidence, not assumptions.
Crypto assets can be inherited like any other asset. The difference lies in their traceability. Where bank statements and account statements are lacking, the available evidence is what matters. A structured Crypto forensics It clarifies whether assets exist, how high they were on the date of death, and whether any dispositions were made afterward. This provides security for heirs, executors, and law firms advising on estate matters.
Are you handling an estate that may contain crypto assets? Describe the case to us. We will get back to you with an initial assessment.
FAQs: Frequently asked questions about digital legacy
Digital assets encompass all digital accounts, data, contracts, and assets of a deceased person. This includes email inboxes, social media profiles, online accounts, and cryptocurrencies. Like the rest of the estate, they pass to the heirs.
Yes. Crypto assets are part of the deceased's estate and pass to the heirs according to § 1922 of the German Civil Code (BGB). However, heirs can only effectively dispose of them if they have access to the exchange account or the private key.
Evidence can be found in bank statements showing payments to cryptocurrency exchanges, emails from trading platforms, wallet apps on smartphones and computers, hardware wallets, written word lists, and tax documents. A forensic examination systematically analyzes these sources.
Without a seed phrase or private key, it is impossible to access self-held crypto assets. The holdings remain visible on the blockchain and can be verified. In some cases, backups are found on devices or in documents.
Regulated providers provide information and pay out assets to heirs upon presentation of a death certificate and proof of inheritance. With providers outside the EU, the requirements are often higher and the procedures more lengthy.
The decisive factor is the value on the date of death. Due to significant price fluctuations, the holdings, the source of the price, and the date should be verifiably documented. A forensic valuation on that date provides this documentation.
Yes. Crypto assets are part of the taxable acquisition. Furthermore, if heirs discover that the deceased failed to declare certain profits, they must correct this in accordance with Section 153 of the German Fiscal Code (AO). A tax advisor should provide the necessary tax advice.
Yes, provided there are points of connection. Further holdings and transactions can be reconstructed from bank outflows, known addresses, or stock market accounts. Even transactions made after the date of death are permanently verifiable on the blockchain.
Keep devices unaltered. Do not reset, sell, delete apps, or guess passwords, as some wallets lock after incorrect attempts. Smartphones, computers, and hardware wallets may be the only access point.
Create a list of your stock market accounts and wallets, arrange for the secure storage of your login credentials, and document your digital legacy in your will and power of attorney. The seed phrase itself does not belong in the will.
A notice: Finanz Forensik GmbH is neither a law firm nor a tax consultancy. This article is for general information purposes only and does not replace legal or tax advice in individual cases. Our service is the forensic analysis and documentation of cryptocurrency transactions. Legal and tax assessments are handled by lawyers and tax advisors, with whom we collaborate upon request.
