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Chapter 7 · What happens if you die tomorrow

If You Die Tomorrow, Can Your Family Get Your Bitcoin?

Prefer to watch? This chapter is also a short video (about 4½ minutes). The full text is below.

In one minute: If the person who handles the bitcoin dies tomorrow, everything they did to keep strangers out also keeps the family out. The fix is a short, private letter that tells the right person four things: that the bitcoin exists, where the pieces are, how to put them together, and who can safely help. It is not the will: a will usually becomes a public record once it goes through probate. The letter says where things are, never what the words are. Each level needs slightly different pieces in it, and the plan only counts once the two of you have walked through it together.

Go back to the drawer from Chapter 1. He's gone. She has a small device asking for a PIN she doesn't know, no idea whether there are words written down anywhere, and three "recovery services" in her search results.

He wasn't careless. He did everything right to keep strangers out. He just never wrote down the one thing that would let her in.

This chapter is that one thing.

What she needs to know

Whoever inherits your bitcoin needs four things, and only four:

1. That it exists. Bitcoin doesn't send statements. If nobody knows it's there, nobody goes looking.
2. Where the pieces are. The device, each copy of the recovery words, and anything else your level uses.
3. How to put them together. Which app to install, in plain steps, written for someone who has never done it.
4. Who can safely help. One person you trust, by name, who can sit beside her while she does it.

Why it can't go in the will

The obvious place for all this is your will. It's the wrong place.

A will is private while you're alive. But once it goes through probate, it usually becomes a public record: anyone can visit the court and read it. ¹ If the will says where the recovery words are, so does the public record.

The will still matters. It's where you say who inherits the bitcoin, the same as any other asset. Talk to an estate lawyer about that part. Just keep the how out of it.

The letter of instruction

The how goes in a separate, private document called a letter of instruction. It isn't a legal document. Financial firms describe it as an informal letter to your executor or family about your assets and wishes, which isn't legally binding but makes things much easier for a grieving family. ² Lots of people write one for their bank accounts and insurance policies. Yours just has a bitcoin page.

The bitcoin page says:

• What you own, roughly. "Some bitcoin, on one hardware wallet" is enough. Amounts change; the letter doesn't need to.
• Where each piece is. "The device is in the desk at home. One metal backup is in the safe deposit box at our bank; the other is with my sister."
• Which app to use, and a few plain steps to restore.
• Who can help. One trusted person, by name, who understands bitcoin.
• What not to do. Never type the words into a phone or computer. Nobody real ever asks for them. Nothing expires, so there's no rush.

And it never says the words themselves. The letter says where. The metal says what. Someone who finds the letter still has to get to the backups, and someone who finds a backup still doesn't know what it is or what it opens.

Keep the letter somewhere your family will find it quickly: with your will, with your lawyer, or in your home safe. Tell the person who'll need it that it exists.

One page per level

Each level stores its bitcoin a little differently, so each level's page lists different pieces. Here's the preview. The full, fill-in-the-blanks version comes with each level's setup guide.

Beginner: one hardware wallet. Two pieces matter: the device and the recovery words, which live on two metal backups in two places (Chapter 6). The page says where both backups are, which device and app you use, and how to restore. With either backup, she can rebuild everything on a brand-new device.

Intermediate: words plus a passphrase. A passphrase is an extra secret added to your words. It protects you if someone finds your backup, because the words alone open nothing. But it cuts both ways: if the passphrase is lost, the bitcoin is lost too. Nobody can recover it, not even the device's maker. ³ So the passphrase gets its own backup, stored apart from the words, and the page says where both are.

Advanced: 2-of-3 multisig. Three keys in three places, and any two can move the bitcoin. But there's a catch most people don't know: two sets of recovery words are not enough on their own. You also need a backup of the wallet's setup file, the "map" that says how the three keys fit together. Without it, losing one key can mean losing everything. ⁴ So the page lists all three keys, where the map is, and which app reads it.

Rehearse it

A plan nobody has tried is the same as a backup nobody has tested. So once it's written:

• Read it together. Out loud, at the kitchen table. Anything she doesn't understand gets rewritten until she does.
• Let her do the recovery drill from Chapter 6, with you watching but not touching. If she can restore the wallet from the backup while you sit on your hands, the plan works.
• Update it once a year, and whenever something changes: a new device, a new backup location, a new helper.

Talk about it

1. If one of us died tomorrow, would the other know the bitcoin exists, where every piece is, and what to do first?
2. Who is the one person we'd trust to sit beside us while we did it?
3. Where would we keep the letter, so it's easy for us to find and hard for anyone else?

You don't have to write the whole letter tonight. Agreeing on the answers to these three is most of it.

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