The Bitcoin Inheritance Plan

A Bitcoin inheritance plan doesn’t need to be legally complex. It needs to solve one problem: the right people can find and access your Bitcoin if something happens to you, without that information being accessible to the wrong people in the meantime.

The solution is a two-part approach — and crucially, the two parts are kept in separate locations.

Part one: the letter. A simple document, kept with your will or with a solicitor, that contains the following:

A statement that you hold Bitcoin and approximately how much. The name of the wallet software or hardware device used. Where the seed phrase can be found — not the seed phrase itself, just its location. The name of a trusted person who understands Bitcoin and can help the executor navigate the process.

This letter contains no private keys and no seed phrase. If it’s found by the wrong person, they learn nothing actionable.

Part two: the seed phrase. Stored separately — in a different physical location from the letter. A secure safe, a bank safety deposit box, or with the trusted person named in the letter.

The separation is the security. The letter points to the seed phrase’s location. The seed phrase is not in the letter. Someone who finds the letter still needs to find the seed phrase. Someone who finds the seed phrase without the letter doesn’t know what it’s for.

The trusted person named in the letter ideally understands Bitcoin well enough to help an executor who doesn’t. This could be an adult child, a close friend, a financial advisor who understands self-custody.

One afternoon of preparation. A conversation with the right person. The problem is solved.

Tomorrow: a story — a family that lost Bitcoin because nobody knew the seed phrase.

— The Daily Bit