How to pass bitcoins to your heirs when you die

Bitcoin Questions and AnswersCategory: QuestionsHow to pass bitcoins to your heirs when you die

Bernard Payne asked 1 year ago

What’s the most foolproof way to ensure your bitcoins can be passed on safely to your heirs in the event of your death? Note this question has two levels of difficulty: 1) safely passing on bitcoins to someone and 2) passing them on according to the terms of your will, which may split the \”bitcoin estate\” two or more ways, and not necessarily in the same proportion. Point 2) implies giving control of the wallet to a Trustee in a sufficiently transparent way that the heirs can check the wallet amounts to ensure they receive all the bitcoins available.

2 Answers
Steven Hay answered 1 year ago

Hello Bernard,
This is a good question, thanks.
I think the simplest and safest way to achieve 1) would be to transfer your bitcoins to a hardware wallet and backup the seed phrase to a Cryptostee or similar “indestructable” storage medium. Hide this seed backup in as secure a location as possible. It should be hidden somewhere on a property under your physical control. Then, if you can absolutely trust your heir, tell them the location of the seed backup, which will unlock their inheritance. If you can’t absolutely trust them, hire a trustworthy party, such as an attorney, to convey this information to them in the event of your passing. Either way, you should also ensure that your heir understands Bitcoin well enough to restore, access and secure the funds.
As for point 2), I’d say the best way to achieve this would be to repeat step 1) but with multiple hardware wallets, each containing amounts proportional to how you wish to distribute your bequest. Of course, you should only tell each heir the location of their particular seed backup, or instruct whoever handles your estate to do likewise. If an agent will handle the matter for you, it may be easier to give them the location of the backup seed in a letter, to be opened in the event of your passing. This agent may then distribute the bitcoins according to your will’s instructions.
It should be possible to refine this process with some further thought. I’d stay away from such things as smart contracts however; I wouldn’t say those are sufficiently tested to handle something like this yet. A good plan properly communicated to your heir(s) and / or a trustworthy professional is still the best option, in my opinion.

Bernard Payne replied 1 year ago

Hi Steven – thank you for your advice: I will investigate the methods you mention. The thought also occurred to me that I would also need a second, backup hardware wallet for each one storing the proportionate bitcoin share of my estate! With a wife and 3 kids that would mean 8 wallets! One more thing: assuming I can trust my heirs to not have to involve a third party, why would it not be sufficient to hold the coins in a software wallet on a USB stick in a secure place, and then pass the wallet’s password on to them? I’m missing some crucial point about the hardware wallet, perhaps.

Steven Hay replied 1 year ago

An additional note: you can check out our Cryptosteel review here:

and this link goes to our hardware wallet reviews for 2017:

Steven Hay answered 1 year ago

Hi Bernard,
OK, so for point 2) it’s not necessary to have a second, backup hardware wallet for each heir. The seed phrase backup alone is sufficient to restore the hardware wallet’s contents to any compatible wallet, be it online, software, paper or hardware. The reason I recommend using hardware wallets is that your heirs would probably inherit significant sums of money. Hardware wallets are the safest method of Bitcoin storage, so I highly recommend them for something like this. If the hardware wallet itself is lost or destroyed, it doesn’t much matter. HW wallets are fairly cheap to replace; the seed phrase is what allows access to the bitcoins.
As to your second question of why it’s necessary to use multiple wallets… The fact is if you use a single wallet, software or hardware, then it’s controlled by a single seed. This is not a good match for a situation with multiple heirs, as it gives them all full control over all the bitcoins controlled in the wallet.
While you could set up a 4 of 4 multisig address which requires a signature from each of them in order to send funds, then give each heir their separate key, this method is complicated and risky. In the event of discord between them, one dissenting heir could prevent the movement of funds. Or, if one heir lost their key, the funds would be similarly locked.
This is a fairly complex problem so arriving at the ideal solution will take some time and knowledge of Bitcoin. I assume that you need control over your bitcoins and don’t know exactly when your heirs will inherit. Using 4 different hardware wallets and regularly balancing the total funds between them in accordance with your desired distribution will be a little unwieldy, but it’s the best solution that I can think of.
There’s also the matter of PINs to consider if you go with the multiple HW wallet plan. Of course you’ll need to know the PIN for each to be able to use it day to day. However, if you want your heirs to continue using these HW wallets uninterrupted without having to import any seed phrases, they’ll need to know the PIN for their particular wallet too. Each PIN could be included with the seed phrase backup, which could perhaps also be engraved with instructions on this process. Your heirs won’t need the PIN in order to restore the wallet however; the seed phrase alone will suffice.
Bitcoin inheritance is a new field so there aren’t many established rules and best practices to go by. I think these suggestions make sense but there could well be a better way of handling it. Much will depend on your circumstances. One of the major problems I forsee, whichever method you decide on, is that your heirs will need to well-educated in Bitcoin and your chosen method.

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