3 questions for attorney Christian Solmecke

Christian Solmecke (48) has specialized as a lawyer and partner in the Cologne media law firm WILDE BEUGER SOLMECKE in advising the Internet and IT industry. In addition to his work as a lawyer, Christian Solmecke is a multiple book author and, as managing director of Legalvisio, the publisher of cloud-based law firm software, also a successful legal tech entrepreneur. With 834,000 subscribers, he is also a prominent figure YouTuber.

BTC-ECHO: Mr. Solmecke, how are bitcoins treated in the event of a divorce? What legal problems could this cause?

If spouses live under the statutory matrimonial property regime of the community of accrued gains, then in the event of a divorce, an application will be made to determine how much wealth both partners have gained during the marriage. Whoever has gained more during this time must then give the other half of this gain.

The period between the date of marriage (initial assets) and the date on which the application for divorce was served (final assets) is decisive. With the enormous fluctuations in value, this can mean that the Bitcoin was worth an enormous amount on the day of delivery, but lost this value again by the end of the process. This can then become expensive bad luck for the supposedly “richer” partner. It could become problematic if a spouse conceals the existence of Bitcoin because this investment works quite anonymously.

There is a right to information, which means that a spouse has to disclose all of their assets. If he conceals Bitcoin, he can also be prosecuted for process fraud. However, there is no guarantee that such concealment will also be exposed. Because unlike classic investments, Bitcoin does not have to be kept in banks, bought with money from a bank account or always traded on an online stock exchange. For example, it is possible to move the wallet to a USB stick and thus hide it “offline”.

BTC-ECHO: What should you definitely pay attention to if you want to inherit Bitcoin and Co.? What are the common problems in practice?

In principle, the heirs inherit the entire fortune – this also includes digital goods such as Bitcoin or, more specifically, access to the wallet using a private key. The fact that digital goods, accounts etc. can also be inherited can be deduced from the BGH judgment on “digital heritage”.

If the testator has physically stored the private key on a USB stick, for example, it immediately passes to the heirs. If the private key is stored in an online wallet, the heir enters into the contract between the testator and the provider and therefore only has a claim against the provider for access to the wallet.

It is important that the testator informs his heirs, for example in the will, which cryptocurrencies are in his possession and how the heirs can obtain them. Otherwise it can happen that this part of the property remains undiscovered.

It can become problematic if, for example, a child who is excluded from the succession demands its compulsory portion from the heirs or the heirs have to pay a portion of the inheritance to someone for other reasons. Then you have to see what the Bitcoin is worth. The reference date for the value is then the date of death of the testator. But, as said earlier, Bitcoin’s value fluctuates significantly. The inheritance tax must of course also be paid and this is also based on the value on the day of death.

BTC-ECHO: What should you pay attention to when donating Bitcoin?

In case of doubt, gift tax must be paid. The day of the donation is decisive. If the value was very high, that also affects the tax. So, one should try to transfer the bitcoin on a day when the value is low. However, some gifts are exempt from this tax – for example a gift to a spouse under 500,000 euros, to a child under 400,000 euros within ten years.

Thank you for the interview.

Disclaimer: The interview is first in the April issue of BTC-ECHO Magazine appeared.