The Transfer of Crypto Assets Through Inheritance in Turkish Law
Introduction
Crypto assets (such as cryptocurrencies, tokens, and similar digital assets) are digital values created using blockchain technology and secured through cryptography. Cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), which have become widespread globally, operate without being tied to a central authority. The legal status of crypto assets in Turkey is not yet clearly defined. Although regulations issued by the Central Bank of the Republic of Turkey in 2021 and guidance from the Financial Crimes Investigation Board (MASAK) provide some definitions related to crypto assets, there is no comprehensive legislation classifying these assets as official currency, securities, or commodities. Despite this uncertainty, cryptocurrencies are considered legal property assets because they hold economic value. Therefore, the status of crypto assets owned by individuals upon their death and their transfer to heirs under inheritance law is important.
Transfer of Cryptocurrencies Within the Scope of Inheritance Law
According to the Turkish Civil Code (TCC), inheritance opens automatically at the time of the deceased’s death, and the estate (the property left by the deceased) passes as a whole to the legal heirs. Pursuant to Article 599 of the TCC, heirs succeed to the estate upon the death of the deceased. The estate encompasses all tangible and intangible assets measurable in monetary terms. In this context, cryptocurrencies and other digital assets, although not physical assets, pass as part of the estate to the heirs. In other words, the deceased’s crypto assets legally belong to the heirs, and the heirs acquire rights over them.
However, the place of crypto assets in inheritance law raises some unique issues. Unlike traditional assets, the transfer of rights over cryptocurrencies may encounter technical and practical obstacles. Nonetheless, legally, within the current legal framework, the transfer of crypto assets is treated like other property assets. If the deceased left a will, the distribution of crypto assets will be determined according to the will. If there is no will, cryptocurrencies are shared among legal heirs according to their statutory shares. Consequently, since there is no special legal regulation in Turkish law preventing the transfer of crypto assets through inheritance, they are transferred to heirs under the general inheritance provisions.
Identification, Valuation, and Transfer Process
There are significant challenges in the identification, valuation, and actual transfer stages of crypto assets to heirs. Each of these stages requires care during the inheritance process, and innovative approaches may be needed for solutions:
Identification of Assets: Determining the existence and location of the deceased’s crypto assets is the first major practical challenge. Since cryptocurrencies lack a central registry system, they are typically held in wallets or exchange accounts known only to the owner. If heirs do not have information about the deceased’s digital wallets or exchange accounts, it becomes difficult for them to be aware of these assets. Unlike bank accounts, crypto balances cannot be automatically detected by government authorities. Therefore, heirs must investigate clues to crypto assets through documents left by the deceased, digital devices, email accounts, or financial records. In practice, many heirs learn about the deceased’s cryptocurrencies only by chance after death or may never learn about them at all. Obtaining a certificate of inheritance (veraset ilamı) is the necessary first step for heirs to claim legal rights, but this certificate does not indicate whether crypto assets exist. To solve this problem, it is recommended that the deceased entrust trusted persons with private key information beforehand or mention digital assets in a will. Otherwise, since access to an unknown wallet will be impossible, crypto assets may not practically be included in the estate even if they have legally passed to heirs.
Valuation: Because the market value of cryptocurrencies is highly volatile, determining their value as of the date of inheritance opening is challenging. Heirs must determine the Turkish Lira equivalent of the crypto assets for inheritance and transfer tax purposes and for the division of the estate. There is no special legal method for valuing crypto assets in the legislation. In practice, a reasonable approach is to use the average market price closest to the date of death. For example, the average value during the 7-10 days following the date of death can be used as a reference to determine the tax base. This method may reduce the impact of sudden price fluctuations. Uncertainty in valuation complicates both fair sharing among heirs and tax calculation. Heirs may also choose to sell the crypto assets and share the Turkish Lira proceeds; in that case, the sale value at the time will be used. Therefore, correctly appraising the value of crypto assets in inheritance matters is critical to prevent future disputes and tax penalties.
Execution of Transfer: The actual transfer of crypto assets to heirs depends on the platform or wallet where the assets are held. If the deceased’s crypto assets are held in an account at a cryptocurrency exchange, heirs need to apply to the relevant exchange with official documents (certificate of inheritance, death certificate, etc.) to claim their rights over the account. Some exchanges may have procedures for transferring accounts to heirs upon the death of the account holder (such as freezing the account and opening a new account for heirs). This process should be carried out similarly to the transfer of traditional bank accounts to heirs. However, if the exchanges are located in foreign countries or lack adequate legal regulations, heirs may face lengthy correspondence and potentially litigation to secure their rights.
On the other hand, if cryptocurrencies are stored in private wallets (such as cold wallets, hardware wallets, or software wallets), the private key or password required to access these wallets is critically important. If the heirs do not know the password or seed phrases of the deceased’s wallet, it will technically be impossible for them to access these assets. Legally, cryptocurrencies that belong to the estate but lack password access are effectively lost in practice. However, if the deceased took prior precautions by sharing the private key information with a trusted person or including it in a secure will, the heirs can access this information and transfer the cryptocurrencies from the wallets to their own accounts. This transfer usually involves sending the relevant cryptocurrencies to a new wallet address controlled by the heirs. Since crypto assets are technically divisible (for example, a small fraction of a Bitcoin can be transferred), it is also possible to distribute them among multiple heirs. Nevertheless, unless all heirs have access rights, issues of transparency and trust may arise during the distribution process. Therefore, digital inheritance planning—i.e., making prior arrangements on how crypto assets will be inherited (for example, through a will or a smart contract)—is the healthiest approach. Although still limited in practice, some digital asset management services offer to securely transmit private keys to heirs in the event of the user’s death.
Inheritance and Transfer Tax
Heirs who receive cryptocurrencies or other assets from a deceased person become taxpayers under the Inheritance and Transfer Tax Law (VİVK). VİVK is the law that subjects inheritances and gratuitous acquisitions to tax. Although cryptocurrencies are not explicitly mentioned in the legislation, the transfer of any property value by inheritance constitutes a taxable event. Therefore, there is a transfer and inheritance tax obligation for cryptocurrencies inherited. According to Article 1 of VİVK, the inheritance of assets located in Turkey is taxable, and the heirs are the taxpayers.
Heirs are required to file an inheritance and transfer tax declaration within a specified period following the death of the deceased (4 months after death in Turkey, or 6 months if death occurs abroad). In this declaration, all values included in the estate must be reported, including cryptocurrencies. In practice, some heirs may fail to include cryptocurrencies because they are unaware of their existence; however, failure to declare known cryptocurrencies constitutes tax loss under the law. Therefore, detecting and accurately valuing crypto assets is important to fully comply with tax obligations.
Tax rates and exemptions: Inheritance and transfer tax is applied progressively depending on the degree of kinship and the value of the inherited asset. The law distinguishes between close relatives (such as spouse and children) and more distant persons with different tax rates. Tariff I, which applies to inheritances, generally starts with low rates: tax rates range progressively from 1% up to 10% as the value increases. Gratuitous acquisitions (such as gifts) fall under Tariff II with higher rates, typically ranging from 10% to 30%. There is also an annually updated exemption amount. This exemption exempts the shares of close heirs up to a certain value from tax. For example, in 2023, the exemption was approximately 500,000 TRY for first-degree heirs, adjusted annually for inflation. If the value of the inherited cryptocurrencies exceeds this exemption amount, the excess is subject to tax.
Example application: Suppose a single heir inherits cryptocurrencies worth 1,000,000 TRY. Assuming a simple exemption amount of 500,000 TRY for 2025, the heir pays no tax on the first 500,000 TRY. The remaining 500,000 TRY is taxed progressively according to the tariff rates—e.g., 1%, 3%, 5%—resulting in a total tax around 10,000 TRY (these figures are illustrative and depend on current tariff brackets). Taxes can usually be paid in installments over up to three years in six installments. The heir is responsible for paying the inheritance tax calculated on the declared crypto assets within the deadline. Failure to do so results in penalties and late payment interest.
The greatest uncertainty in the taxation of cryptocurrencies concerns the valuation of these assets, as mentioned above. The Revenue Administration (GİB) has not yet published a specific guideline on inheritance tax declaration for crypto assets. This lack often causes heirs to declare cryptocurrencies late or not at all. In the future, a guide or communiqué issued by GİB may clarify how to value and declare crypto assets. Also, legislators may consider special regulations on tax rates or exemptions for cryptocurrency transfers. Currently, existing VİVK provisions apply to cryptocurrencies inherited, just like other assets.
Conclusion
The inheritance of cryptocurrencies and digital assets is a relatively new and evolving field in Turkish law. Although the current legal framework does not contain provisions specific to crypto assets, general inheritance and tax law principles apply to them as well. This situation confirms that cryptocurrencies are property that can be inherited but also reveals significant gaps and deficiencies in practice. Technical barriers exist regarding the detection of crypto assets and access by heirs. Lack of information about the deceased’s digital assets may cause heirs to suffer loss of rights. To remedy this, it is extremely important for individuals to conduct digital inheritance planning. Practicing lawyers should advise their clients to prepare wills regarding crypto assets, keep private keys in secure places, or share them with trusted persons.
From a legislative perspective, more concrete regulations covering cryptocurrencies are needed in Turkey. Lawmakers should define crypto assets legally and clearly specify how they will be treated in inheritance, tax, and ownership regimes. For example, adding clarifying provisions in the Turkish Civil Code that include digital assets in the estate, or regulating valuation and declaration principles specific to crypto assets in the Inheritance and Transfer Tax Law, would be beneficial. Also, crypto exchanges should be encouraged to develop standard procedures for account transfer upon user death. This would allow heirs to more easily receive cryptocurrencies held on exchanges.
In summary, the transfer of cryptocurrencies to heirs is a multifaceted process with legal and practical dimensions. To find solutions within the current legal system, classical inheritance law rules must be adapted to the features of crypto assets. The safest way for heirs is that the deceased has taken prior precautions. Through wills, digital inheritance services, or family notifications, the fate of cryptocurrencies after death should be planned. Legally, laws must be updated and harmonized with technological developments to ensure a fair, secure, and efficient intergenerational transfer of crypto assets—an increasingly common part of many portfolios.