Government seeks funds from dormant bank accounts - Banking Association expresses disapproval
Unclaimed Billions in German Bank Accounts: A Challenge for Social Investments
May 28, 2025, 05:00 AM
An estimated two to nine billion euros worth of funds lie untouched in German bank accounts, belonging to individuals who appear to have passed away without identified heirs. Known as "dormant accounts," these accounts have attracted the attention of the German government, which aims to redirect these funds towards a social investment fund as outlined in the coalition agreement between the Union and the SPD. However, achieving this goal presents substantial legal hurdles.
Legal Challenges in Accessing Dormant Account Funds
The process of securing funds from dormant accounts comes with high legal barriers. When someone dies without heirs, the state typically claims the funds as they currently stand. Yet, if the state fails to assert its claims within 30 years, the wealth becomes the property of the bank. The exact duration of inactivity required to classify an account as dormant remains unclear due to the lack of legal guidelines.
Thorsten Hoeche, chief legal officer of the German Banking Association, highlights potential concerns: "The question of an inactive account is a question of time - after what period of inactivity does the state want to access the funds? There are currently no legal guidelines, so the question of what is considered an inactive account is actually open."
Interfering with Property Rights and Legal Uncertainties
If the state were to define the duration of inactivity, it could potentially interfere with the property rights of deceased individuals or account holders who are still alive. The government could potentially access funds from banks that rightfully belong to someone else, simply because their account has been labeled as dormant.
An additional legal issue stems from the compatibility of such a regulation with German law. Currently, the government must first establish whether there are any specific heirs before claiming funds from the deceased account holder. The legality of a situation where the state claims funds without proper inheritance procedures remains uncertain.
Inheritance and Legal Procedures
It is crucial to determine whether a potential regulation would be compatible with German law. In the absence of heirs, funds do not immediately transfer to the state. Instead, the inheritance of the fisc is established, allowing the state to assert its claims against banks and other creditors, acting as any other heir.
Saxony's Inheritance: 8.7 Million Euros
In a separate development, Saxony has inherited 8.7 million euros, taking over over 1,200 inheritances last year when no heirs could be identified.
Drafting a Will for Proper Estate Settlement
To regulate the inheritance process and prevent disputes, it's essential to consider various factors when drafting a will, as Gilbert Haeffner, an expert, advises.
Expiration of Government Claims and Bank Ownership
If the state does not claim a deceased account holder's inheritance, the claim expires after 30 years, and the bank can keep the funds.
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In the pursuit of social investments, the German government faces legal challenges in accessing dormant accounts, as the duration of inactivity required to classify an account as dormant remains unclear due to a lack of legal guidelines. Additionally, potential interferences with property rights and legal uncertainties arise, as the state may claim funds from banks that rightfully belong to someone else, solely because their account has been labeled as dormant, which could conflict with German law and existing inheritance procedures.
