Billions of euros are silently accumulating in Germany’s financial institutions, held within so-called ‘forgotten accounts’ that remain unused and unnoticed. A 2021 report from the country’s research ministry estimated this sum to be up to €4.2 billion ($4.9 billion), though other estimates suggest figures as high as €9 billion. This substantial wealth, largely inaccessible to heirs and without a clear legal framework for its management, has ignited a debate among banks, politicians, and the public regarding its ultimate control and purpose.
The Scale of the Problem and Germany’s Unique Stance
The issue of dormant accounts in Germany is exacerbated by several factors. As individuals age, maintain multiple accounts, or pass away, relatives and heirs often struggle to identify existing financial assets. The rise of online banking, which reduces physical paperwork, further complicates matters, as crucial information may be confined to email accounts or hard drives. Non-traditional assets like cryptocurrencies and NFTs present even greater challenges for tracking.
Unlike many other nations, Germany lacks an official definition for abandoned accounts. This absence of a legal framework has largely left the management of these accounts to the discretion of individual banks. Generally, banks consider an account dormant if the holder has died with no identifiable heirs, if there has been no customer contact for years, or if postal mail is returned due to outdated contact information. This flexibility, however, also provides banks with ‘wiggle room’ in the extent of their efforts to locate owners or heirs. A significant obstacle in this search is Germany’s stringent data protection regulations.
Crucially, in Germany, dormant accounts do not automatically become the property of banks, nor are they transferred to the government. Banks are legally obliged to maintain these accounts indefinitely, and ownership — whether by the original holder or their heirs — never expires. The German government can only claim an account if it is declared an heir under the country’s inheritance law, not through any unclaimed property regulations.
The Push for a Central Register and Public Opinion
A key measure advocated by experts is the establishment of a central dormant account register. Beatrice Eisenschmidt, a board member at VDEE, a Berlin-based association representing professional heir finders, emphasizes that such a register is essential for determining if an individual held accounts. Currently, inquiries must be directed to various banking associations, a process that is both time-consuming and costly. For potential heirs, this often amounts to ‘a shot in the dark,’ leading many to forgo such inquiries, as Eisenschmidt told DW.
Attempts to create a national registry are not new. Nearly a decade ago, Norbert Walter-Borjans, then finance minister of North Rhine-Westphalia, estimated approximately €2 billion ($2.2 billion at the time) was held in dormant accounts nationwide and called for a national registry of dormant assets. The current federal government, led by Chancellor Friedrich Merz, has since introduced draft legislation to establish a central, publicly accessible online register where heirs could search for information. However, new regulations have yet to be passed, and the ultimate disposition of the funds remains undecided.
Public sentiment on the matter appears clear. A recent survey commissioned by the charity SOS Children’s Villages revealed that 86% of respondents believe forgotten bank assets should flow into a fund for social projects after a reasonable period. In contrast, only 8% thought the money should go to the government, and a mere 2% believed banks should retain it.
International Approaches to Dormant Assets
Germany’s approach stands in contrast to systems in other countries:
- United Kingdom: Dormant accounts are transferred to a reclaim fund, not the government, typically after 15 years. This fund supports social and environmental projects, but the money can be reclaimed indefinitely.
- Ireland: A similar timeframe applies, but funds are transferred to the treasury for social projects. Institutions must publish notices in national newspapers before transfer, and accounts, plus interest, can be reclaimed without a time limit.
- United States: State laws govern abandoned accounts, which are generally considered dormant after 3-5 years of inactivity. Banks must attempt to contact owners, and if unsuccessful, the state (usually of the owner’s last known address) takes custody. These funds are held in unclaimed property offices, often with public notices, and owners can typically reclaim them indefinitely.
- France: Banks must attempt to contact owners, but after 10 years of dormancy, accounts and life insurance policies are moved to a public financial institution, the CDC. While a searchable database is provided, the government does not actively search for holders. The funds become the property of the French state 20 years later and can no longer be reclaimed.
- Switzerland: Banks are expected to preserve assets and manage dormant accounts in clients’ best interests. A centralized database exists. After 60 years of no contact, account information is published, giving heirs one year to claim. After this period, claims lapse, and the account is liquidated and transferred to the government, including the contents of safe-deposit boxes.
The ongoing debate in Germany highlights a significant financial and ethical challenge. While the current government has signaled intent to address the issue, the path forward involves navigating complex legal frameworks, data protection concerns, and differing views on how billions in forgotten wealth should ultimately serve the public good.
