A Bitcoin inheritance plan your family can follow

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Cold storage is designed so that nobody else can get your bitcoin. That is also what makes it hard to pass on. Without a plan, coins that are perfectly safe today can be lost forever if something happens to you.

This guide covers the practical side. For wills, trusts and taxes where you live, talk to an estate attorney. Ideally find one who has worked with bitcoin before.

The core problem

To recover your bitcoin, your heirs need three things:

Knowledge that the bitcoin exists and roughly where it is.
Access to the backups (seed words, passphrase, wallet files).
Ability to use them safely without getting scammed.

The challenge is giving them all three later without making it easy for a thief, or a family member, to take the coins now.

Write a letter of instructions

The heart of any plan is a plain-language letter. Write it for someone who has never used bitcoin and is grieving. Keep it short and clear.

What to include

That you own bitcoin, and roughly what kind of setup you use (single key, multisig, which devices).
Where the pieces are. “The steel backup is in the safe deposit box at [bank]. The hardware wallet is in the home safe.” Locations, not contents.
What software to use. For example, “Install Sparrow Wallet from the official website.”
Step-by-step recovery. Short numbered steps, or a reference to a guide like the ones on this site.
Who to ask for help, and who not to. Name one or two technically capable people you trust.
A warning about scams. Say clearly that nobody should ever be given the seed phrase, and that “recovery services” contacting them are likely fraud.
Anything unusual. If you use a passphrase, multisig, or a non-standard setting, say so. Heirs will not guess.

What to leave out

The seed words themselves. The letter should point to the backup, not contain it. If the letter is found, it should not be enough to steal the coins.
Exact balances. Amounts change, and listing them raises the stakes if the letter is read early.
Passwords in plain text next to the seed’s location. Keep the pieces apart.

The letter tells people how to find and use the backups. It should never be a backup itself.

Where to keep the letter

With your will or estate documents, held by your attorney.
A sealed copy with someone you trust, separate from the seed backups.
Not in the same place as the seed words.

The idea is that no single place gives someone everything they need.

Single key: the simple version

With a single hardware wallet and one seed backup, a basic plan looks like this:

The seed backup is in one secure place (for example a safe deposit box your executor can access).
The letter of instructions is with your attorney.
If you use a passphrase, it is stored separately, with instructions on where.

This works, but it has a weakness. Whoever gets the seed backup can spend everything. You are trusting that location and everyone with access to it.

Multisig: the stronger version

2-of-3 multisig is one of the best tools for inheritance. Your bitcoin needs any two of three keys to spend.

A common layout:

Key A at your home.
Key B in a safe deposit box.
Key C with a trusted person or a professional.

Why it helps:

No single location or person can take the coins alone.
If you die, your heirs can combine two keys to recover.
If one key is lost or stolen, the coins are still safe.

You must also back up the wallet descriptor (the file that describes the multisig setup) and keep a copy with each key. Without it, recovery is much harder.

Devices from different makers make good keys, for example Coldcard Q, Keystone 3 Pro and a SeedSigner.

Collaborative custody

Services like Unchained run a 2-of-3 setup where you hold two keys and the company holds one. They can help your heirs through recovery. Unchained also offers inheritance tools, such as a set of recovery documents for your executor and trust-owned vaults. Check their site for current options. You still control the coins, because the company cannot spend with one key. You do pay a fee and share some information with them.

Who to trust

Pick people carefully.

Your executor needs to know the plan exists and where the letter is.
A technical helper can walk your heirs through recovery. Choose someone honest, not just someone who knows bitcoin.
Do not give one person everything unless you trust them with the coins today.

It is worth telling your heirs, at least in general terms, that bitcoin exists and a plan is in place. Many families never find out.

Test the plan

A plan nobody has tried may not work.

Ask your technical helper to read the letter and point out anything unclear.
Run a recovery yourself using only what the letter describes. Practice on signet if you do not want to touch real funds.
Make sure the software you name still exists and works.

Review it every year

Set a yearly reminder to:

Confirm backups are where the letter says they are.
Check the steel is intact and readable.
Update the letter if you changed devices, wallets or locations.
Make sure your trusted people are still the right people.
Check the wallet software you reference is still maintained.

A short checklist

Letter of instructions written in plain language
Letter points to backups but does not contain seed words
Letter stored with your attorney and/or a trusted person, apart from backups
Passphrase and multisig details documented, stored separately
Technical helper named and briefed
Recovery tested using only the letter
Yearly review on the calendar
Will and estate plan reviewed by an estate attorney

Next steps

Learn how to set up shared keys in 2-of-3 multisig.
Make sure your backups are solid with seed backups.