Cryptocurrencies in Decline: How to Secure Digital Assets for Loved Ones?

In the drawer of the deceased lies a metal device the size of a USB drive, on the phone an exchange app with a balance that no one in the family can read, and in a notebook, twelve English words without a title. This is what an inheritance looks like today, one that neither the legislator of 1964 nor most cryptocurrency holders considered. Chainalysis estimated in 2020 that about one-fifth of all bitcoins are lost forever; newer analyses speak of several percent, and some of these coins disappeared along with the owner, who left no access to anyone.

I described the legal framework for inheriting cryptocurrencies in a guide on inheritances at testamenty.eu. Here, I look at the same problem from the other side: through the eyes of the heir who is already standing in front of the drawer, and the holder who wants their loved ones to never find themselves in such a situation. There are always three barriers: legal title, technical access, and taxes. The third can often be the most expensive.

Table of Contents

• The law gives title, the key gives access
• Will, bequest, notarial deposit
• Taxes: where do heirs lose the most?
• Checklist
• Conclusions

The Law Gives Title, the Key Gives Access

Cryptocurrencies enter the inheritance like any transferable property right (Article 922 of the Civil Code). The heir acquires them at the moment of the testator's death, but in relation to the exchange, bank, or office, they will only demonstrate their right with a final court decision confirming the acquisition of the inheritance or a registered certificate of inheritance (Article 1027 of the Civil Code). For foreign exchanges, a European certificate of inheritance from Regulation 650/2012 is useful, recognized in the EU countries linked by this regulation (except Denmark and Ireland) without additional recognition procedures; however, with an operator from the USA, Seychelles, or another jurisdiction outside the EU, it does not work automatically, and one must return to sworn translations, apostilles, and the exchange's own forms, which costs money and time.

However, title does not equal access. In the world of cryptocurrencies, there are two completely different assets.

Funds on the exchange are not the deceased's cryptocurrency but a claim against the exchange. The heir takes over this claim and realizes it in the operator's procedure: Binance conducts it under the name Inheritance Appeal, Coinbase requires a death certificate, an inheritance document, and a written instruction on where to transfer the assets. Procedures take weeks or months, and outside the EU, there is also the time for document legalization. There is also the risk that BitHub readers know better than others: a claim against the exchange is worth as much as the exchange itself. Regulation MiCA (Article 75(7)) requires licensed providers to legally and operationally segregate clients' crypto-assets so that in bankruptcy, the provider's creditors do not have access to them; however, this protection only works where the provider had permission, the segregation was real, and national law recognizes it in bankruptcy proceedings. When on August 27, 2026, the court in Harju declared BB Trade Estonia, the operator of zondacrypto, bankrupt, the heirs of its clients did not inherit bitcoins but a claim filed with the Estonian trustee in euros; whether there will be assets in the estate that can be attributed to specific accounts will only be determined by the proceedings.

Funds in a personal wallet represent pure control over the key. Anyone who knows the seed phrase can transfer coins; the law simply follows them. Those who do not know it have nothing: there is no recovery procedure for a personal wallet, and neither a court, nor a notary, nor the device manufacturer can recreate the key. A relative who, just in case, transfers funds from a deceased person's wallet to their own before the circle of heirs is established is on shaky ground. If they act with the intention of keeping them for themselves, it involves misappropriation of property rights (Article 284 of the Penal Code), and prosecution against a close person occurs only at the request of the aggrieved party (Article 284 § 4). A more certain and always available route is civil: other heirs demand restitution for unjust enrichment (Article 405 of the Civil Code) or settlement of the transferred funds in the division of the estate. The transfer itself is recorded in a public register forever, although the connection of the target address to a specific person still needs to be proven with evidence outside the chain; I wrote in a previous text about how much the blockchain reveals about transactions.

Will, Bequest, Notarial Deposit

The basic tool remains the same as with a house and garden: a will, preferably notarized. However, there is one difference that most guides overlook. The seed phrase cannot be included in the content of the will. A will is subject to opening and announcement after death (Articles 649 and following of the Code of Civil Procedure), and its content is known to all interested parties, including those whom the testator omitted. A handwritten will goes into the court records. Twelve words in a will are twelve words in the records.

The solution is to separate the disposition from access. The will indicates who inherits the cryptocurrencies, while the access instructions go to the notarial deposit: the notary accepts documents for safekeeping, including in sealed envelopes, and secured data carriers (Article 106 of the Notarial Law), and in the acceptance protocol, records to whom and under what conditions the deposit is to be released (Article 107); Article 108 applies only to money and securities. Additionally, a bequest (Article 981¹ of the Civil Code): cryptocurrencies as transferable property rights (Article 981¹ § 2 point 2) can belong to the designated person from the moment of opening the estate, without waiting for the division of the estate, provided that the will is in the form of a notarial deed, and the bequest identifies a specific wallet or account, not "my bitcoins." Those who want someone competent to oversee the technical side appoint an executor of the will (Article 986 of the Civil Code), for example, a person who holds one of the keys in a multi-signature wallet of the two-of-three type.

Two things that owners forget, but courts do not. First: cryptocurrencies purchased during marriage with joint funds belong to the community property (Article 31 of the Family and Guardianship Code). Half enters the estate; the other half is the spouse's property, and a will that disposes of all my bitcoins disposes of someone else's property in that part. Second: omitted descendants in the will, the spouse, and parents have the right to a forced share, and for its calculation, the value of cryptocurrencies is determined according to the state at the time of opening the estate and prices at the time of adjudication (resolution of the Supreme Court of March 26, 1985, III CZP 75/84, and subsequent case law): the number of coins freezes on the day of death, their price flows until the day of the verdict. With assets that can double in price in a year or lose half, it is this principle, not the state of the estate on the day of death, that determines the amount of claims.

Automated systems like dead man's switches and wills written in smart contracts do not replace any of these actions. They transfer control over the key, not the legal title; whoever receives funds outside the order of inheritance is liable to heirs for unjust enrichment. They can complement the will when the beneficiary of the machine is also the legatee. Then technology and law speak the same language.

Data: Where Heirs Lose the Most?

Inheritance and gift tax. Spouses, descendants, ascendants, stepchildren, siblings, stepparents are exempt (Article 4a of the Inheritance and Gift Tax Act) if they report the acquisition on form SD-Z2 within six months. From January 7, 2026, the deadline is counted from the finalization of the court decision, registration of the certificate of inheritance, or issuance of the European Certificate of Inheritance, as that is when the tax obligation arises (amended Article 6, paragraph 1, point 1). The amendment also added Article 4c: the deadline can be restored if the heir proves that they missed it without their fault. And if the wallet is found after years, Article 4a, paragraph 2 applies: six months is counted from the day the heir learned of the acquisition, provided that this circumstance is proven. For cryptocurrencies, this is a crucial provision, as a device from a drawer often reveals its value only after the inheritance case is closed.

It is worth submitting the SD-Z2 even when there will be no tax, and it should be carefully valued. The National Bank of Poland does not publish cryptocurrency exchange rates, so the valuation is based on the quotation from a major exchange with a date and time stamp; there is no uniform method, so proof of valuation must be kept. This is the only document that will later show the exchange, the bank, and the tax office where the heir obtained the cryptocurrencies. For the year 2026, exchanges are already collecting data under DAC8, and from 2027, the tax administration will receive reports covering both the deceased's account and subsequent sales by the heir; the absence of SD-Z2 in this picture is an invitation to proceedings regarding undisclosed sources of income.

Those who do not belong to the immediate family pay. A partner without marriage falls into the third tax group: the tax-free amount is 5,733 PLN, and the tax on the excess increases progressively from 12 to 20 percent (Articles 9 and 15, paragraph 1), which means that for larger portfolios, it effectively approaches 20 percent. The value is determined based on the state on the day of acquisition and prices on the day the tax obligation arises (Article 7, paragraph 1), so for cryptocurrencies, according to the rate on the day of finalization of the decision or registration of the act, not on the day of death. A few months of inheritance proceedings in a bull market can significantly increase the tax on assets that the heir has not yet touched.

Income tax. Here lies the real trap. The mere acquisition of an inheritance is not subject to PIT (Article 2, paragraph 1, point 3 of the Personal Income Tax Act); the tax arises upon sale. The sale of inherited cryptocurrencies is taxed at a rate of 19 percent (Article 30b, paragraph 1a), and the cost of obtaining income is only documented expenses directly incurred for the acquisition (Article 22, paragraph 14). The heir incurred none. The Director of the National Tax Information confirmed in interpretations from February 12, 2025 (0114-KDIP3-1.4011.914.2024.2.AK) and April 4, 2025 (0112-KDIL2-2.4011.136.2025.2.AA) that the expenses of the deceased do not transfer to the heir, and the value accepted in the inheritance tax is not a cost. The second of these interpretations was upheld by the Provincial Administrative Court in Wrocław (judgment of November 27, 2025, I SA/Wr 419/25, not final), rejecting both the analogy to Article 22, paragraph 1d of the PIT Act and the argument from the purpose of exemption in inheritance tax. Conclusion: the heir pays 19 percent on the entire sale amount, reduced only by the transaction fees, as if the bitcoin bought by the father in 2015 for one thousand PLN was acquired for zero. The legislator solved the same problem for real estate already in 2019 (Article 22, paragraph 6d of the PIT Act allows deducting costs incurred by the deceased); nothing has been done for cryptocurrencies.

What can be done. First, do not sell impulsively: exchanging one cryptocurrency for another is tax-neutral, while selling for złoty is not. Second, consider a dispute: the argument regarding tax succession (Article 97 of the Tax Ordinance) and equal treatment of heirs of cryptocurrencies and real estate can be raised, but this is a procedural position, not binding law; the stance of authorities and the first court ruling are currently unfavorable, and individual interpretation only protects the one who applied for it, so an heir with a larger portfolio should obtain their own before selling and be prepared for legal proceedings. Third, do not rely on a family foundation: the Director of KIS in the interpretation from February 2, 2026 (0111-KDIB1-2.4010.654.2025.1.END) stated that even the sale of cryptocurrencies contributed to the foundation and held without trading is subject to a punitive rate of 25 percent CIT, as trading in virtual currency does not fall within the catalog of permitted activities under Article 5 of the Family Foundation Act. The family foundation remains an excellent succession tool for real estate, shares, and securities; for cryptocurrencies, it is, in current interpretative practice, an expensive mistake.

Checklist

For the holder:

• Create an inventory: what assets, where (exchange, hardware wallet, DeFi protocol), in what quantity. The inventory does not include access data and can be kept at home.
• Deposit the access instructions (seed phrase, device PIN, passwords, multi-signature wallet recovery procedure) in a notarial deposit with conditions for release.
• Prepare a notarial will with a bequest for specific wallets and appoint an executor of the will.
• Consider a multi-signature wallet two out of three or a secret sharing scheme using Shamir's method, so that during your lifetime no single person has full access; after a divorce, family conflict, or the death of one of the key holders, the arrangement needs to be rebuilt.
• Update the inventory once a year and inform one trusted person that it exists.

For the heir:

• Secure devices and notes physically, but do not transfer funds until you have the inheritance document and tax plan.
• Obtain a certificate of inheritance or a court ruling; for a foreign exchange, apply for a European inheritance certificate.
• Initiate the exchange's inheritance procedure with a complete set of documents and count the time in months.
• Submit SD-Z2 within six months, with valuation according to the rate on the date of the tax obligation, and keep proof of this valuation.
• Before any sale for fiat currency, calculate the tax on the full amount and consider applying for an individual interpretation.

Conclusions

Inheritance law provides the title, technology provides access, and taxes determine how much of the inherited wealth remains in the family. Of these three barriers, only the first is well described in laws from the last century; the other two must be planned by oneself, preferably when no one is yet thinking about inheritance. A holder who dedicates one afternoon to this at a notary saves their loved ones years of disputes and amounts that no court will return. More about succession planning tools can be found on the law firm's pages.