Bitcoin & Inheritance: How to plan your Bitcoin estate - Bittr Academy

Thinking about your own mortality is uncomfortable, but for Bitcoin holders, inheritance planning is essential. Unlike bank accounts or real estate, there is no central institution that can help in the event of your death. If the private keys are lost or nobody has access, the bitcoin are gone forever.

Estimates suggest that 8–20% of all bitcoin are already permanently inaccessible because holders either passed away or lost their keys. When it comes to inheritance, there are legal specifics that differ from country to country. You need a practical plan and should avoid common mistakes.

Why inheritance planning matters for Bitcoin

Without a clear plan, your bitcoin wealth can become permanently unreachable. Even amounts worth millions can simply vanish.

With Bitcoin, there is no bank and no customer support. In the traditional financial system, the bank handles the transfer of assets to heirs.

With Bitcoin, if nobody has the private key, there is no way to access the funds.

The risk without a plan: If there is no plan for passing on bitcoin to your heirs, your family faces the risk of a complete loss of that wealth. Every year, large amounts are lost this way. Many Bitcoin holders prefer not to think about their own death – around 60% have made no preparations at all. That can have serious consequences: in the worst case, loved ones are left with nothing.

A major hurdle is the complexity for family members. Even technically skilled people often underestimate how difficult Bitcoin inheritance can be for non-technical heirs. Bank deposits or stocks are relatively easy to pass on, while access to a wallet can be a real barrier for someone unfamiliar with Bitcoin. And even if they do manage to gain access, the next problem follows: transactions on the blockchain are irreversible – a single mistake by an inexperienced heir can again result in a total loss. That’s why you should leave your heirs clear instructions and practical guidance in advance.

Today, there are even technical solutions to make bitcoin accessible in the event of death without involving intermediaries. So-called “dead man’s switch” mechanisms or time-delayed multi-signature wallets ensure that after a period of inactivity by the original owner, a pre-defined backup key (for example, held by an heir) can automatically gain control over the coins. If the balance remains untouched for a set amount of time, the backup key becomes valid and can release the bitcoin or transfer them to the heir’s wallet. This kind of inheritance functionality is implemented, for example, in the open-source wallet Liana, which uses a time-locked recovery key.

Legal basics

Bitcoin and other cryptocurrencies are treated legally as assets and can be inherited like any other part of an estate.

In Switzerland, digital assets generally fall under the regular inheritance rules of the Swiss Civil Code. There is no special “crypto inheritance law”: whoever inherits also legally owns the deceased’s bitcoin holdings. In Germany, bitcoin are likewise part of the estate and fall under the principle of universal succession (§1922 BGB): upon death, the entire estate passes automatically to the heirs. However, details and practical challenges differ somewhat between countries:

Statutory succession: If there is no will, statutory succession rules apply. In both Switzerland and Germany, close family members (spouse, children) have minimum legal inheritance rights. Children and spouses are entitled to a compulsory portion of the estate. These compulsory shares prevent you from completely cutting out your closest relatives. Volatile bitcoin prices can add conflict: usually, the relevant value is that on the date of death – if the price drops later, the heirs bear the loss, while compulsory shares are still calculated on the higher, earlier value.
Will (testament): To avoid misunderstandings and disputes, a clearly written will is strongly recommended. It should explicitly state who is to receive the bitcoin. The will must be legally valid – in Germany, it must be handwritten and signed, or notarised. In Switzerland, you can write a holographic will (handwritten, dated and signed) or a public will (before a notary with witnesses). The content should explicitly include your bitcoin so there is no ambiguity. Very important: never write passwords, seeds or private keys directly in the will. A will is usually accessible to several people after your death – the first person to read it could theoretically steal the coins, even before the rightful heirs know about it. Access data should therefore always be documented separately and securely.
Certificate of inheritance and estate documents: When someone dies, heirs often need a certificate of inheritance or similar document from the probate court to prove their status to banks or other institutions. For bitcoin held with custodians, the same applies: exchanges will usually also require proof – in many cases, they won’t release control of accounts unless a certificate of inheritance and a death certificate are submitted. In practice, crypto exchanges are often a challenge, especially if they are located abroad under different legal systems. If the bitcoin are held in a self-custody wallet, actual control is determined solely by who possesses the private key. Heirs with the key can access funds immediately, but so can unauthorised persons who somehow get hold of it, regardless of legal rights. That’s why you should clarify in advance who should receive access, in what form, and where that access information can be found.
Digital estate & power of attorney: It can be useful to appoint a person in a power of attorney or in your will who is explicitly responsible for your digital assets. In Switzerland, this role is similar to an executor of the will for the digital estate. Ideally, this person is familiar with Bitcoin and can secure wallets, terminate contracts (e.g. with exchanges), and transfer the value to the heirs. Without such a regulation, heirs are often left on their own, which can quickly become a problem if they lack technical knowledge. At the same time, this approach has the downside that you must place a high level of trust in another person.

Practical methods

So how can you make sure your bitcoin end up in the right hands when you die? Technically, there are several approaches that can be combined depending on your situation. What matters is that everything is both secure and accessible when needed.

Here are some proven methods:

Store your recovery seed securely: The simplest way to pass on bitcoin is to pass on the seed phrase backup. This 12- or 24-word phrase allows the wallet to be fully restored. Engrave or stamp the seed into metal (to protect against fire, water and physical damage). Store the seed in a very secure location. Whether that is a safe at home or a bank deposit box as a second copy depends on your personal situation and risk assessment. Make sure your heirs know where the seed is stored – for example, via a sealed letter in a bank box or with a notary. That way, beneficiaries can restore the wallet in the event of your death.
Hardware wallet and access data: Many bitcoiners use hardware wallets (such as Passport, Trezor, BitBox, etc.) to secure their keys. You can also plan how the device and its PIN will reach your heirs. One option is to store the hardware wallet in an accessible but safe place and keep the PIN in a separate sealed document. You can also give a backup device to your heirs without revealing the PIN. What you should never do: keep all information together and unprotected (e.g. device and PIN next to each other), as this creates a serious theft risk. Another variant is to protect the wallet with an additional passphrase – heirs would then need both the seed and the passphrase. In that case, they must know that a passphrase exists, otherwise they will not be able to restore access even with the correct seed.
Multisig: In multi-signature (multisig) wallets, multiple keys must sign together to approve a transaction. For example, you could set up a 2-of-3 multisig: you, person A and person B each hold one key. To spend funds, at least two keys are needed. In an inheritance scenario, A and B could move the coins together. The risk, however, is that A and B could theoretically collude against you while you are still alive and steal your bitcoin. Multisig improves security (no single point of failure) and prevents one individual from controlling all funds alone. But setup is more complex – all parties must understand how it works. Some service providers offer dedicated multisig inheritance solutions (see below). For private users, a combination with a lawyer or notary as the third key holder can also make sense: in the event of death, the notary and an heir together can approve a transaction.
Shamir’s Secret Sharing (splitting the seed): Another technical method is to split the seed. Using schemes like Shamir’s Secret Sharing, the seed can be divided into several parts, where only a defined subset is required to reconstruct the original seed. For example, you could create 5 shares and require that at least 3 must be combined to recover the wallet key. You can give the shares to different people (family, friends, lawyer) or store them in different locations. This way, no single person holds the complete key. The downside: in practice, the required number of shares must actually come together when needed. If some parts are lost, the coins may be unrecoverable. This method requires careful planning and a very high level of trust in everyone involved.
Physical copies & notary solutions: In practice, a combination of analogue and legal safeguards often works well. Some users leave a sealed copy of their seed or wallet access data with a notary. The envelope is only handed over to the named heirs after death. This solution offers high security, but you must trust the notary. You can also use bank deposit boxes to store a seed and written instructions. Again, you are relying on an institution, which somewhat contradicts the ideal of full independence – but it can still be pragmatic.
Trusted person: Many heirs know little about Bitcoin. It can therefore make sense to appoint a trusted person with Bitcoin experience as a helper. This could be a good friend, a family member or an advisor who helps the heirs to safely move or manage the coins when the time comes. This trusted third person and their contact details should be mentioned in the estate plan. It is crucial that this person is both trustworthy and competent – they will carry a lot of responsibility in a stressful situation.

Providers and tools

There are already specialised solutions for Bitcoin inheritance. A few examples of providers and tools used in practice:

Casa and Unchained Capital: These wallet providers also offer Bitcoin inheritance services. They use multisig setups where the provider holds one of the keys and collaborates with the heirs in the event of death to unlock the wallet. During your lifetime, you keep control of the remaining keys. These models are similar to a bank safe deposit box for your private key – the company acts as a trusted co-signer. In Germany or Switzerland, there are still few specialised providers, but similar concepts could become more common over time.
Individual approaches: There are already success stories of well-organised Bitcoin inheritance. Some users report stamping their seed phrase into metal plates and storing half of the words with one trusted person and the other half with another. Others rely on a password manager: all access data are stored there and heirs know the master password. Others again simply create a detailed written “Bitcoin inheritance plan” and store it alongside the will.
Time locks: Wallets like Liana use on-chain timelocks for backup or inheritance keys, so that heirs can gain access after certain time periods have passed. These setups can use so-called “expanding/decaying multisigs”, where the required number of signatures decreases over time – for example, a 4-of-4 scheme can transform into 3-of-4 after nine months and later into 1-of-3 (with defined recovery keys). In this way, wallets can be structured so that, after a long period of inactivity, a single key (e.g. held by the heir) is sufficient to spend the funds. Other providers follow similar approaches; Casa, for instance, can trigger an inheritance process after inactivity has been verified and a waiting period has passed, transferring a multisig vault to a designated beneficiary.

Mistakes and risks

There are a few things to watch out for when planning your Bitcoin estate. Here are some common mistakes and risks you should avoid:

No preparations at all: The worst mistake is doing nothing. Without any documentation or hints, heirs are completely in the dark – some may not even know that Bitcoin exists in the first place. It’s therefore important to document early on what you own and who should be informed in the event of your death.
Putting access data directly in the will: As mentioned, you should never write private keys or wallet passwords directly into your will. A will goes through official processes (storage, opening) and may be seen by people who are not entitled to the assets. If it contains a seed, anyone with access to the document can move the bitcoin to their own wallet – possibly even before the official heirs know anything. Sensitive data should always be stored separately and securely.
Insufficient or unclear documentation: A common mistake is to hide backup words or devices somewhere, but fail to explain to the heirs what to do with them. Imagine a relative finding a piece of paper with 24 words and having no idea what they are. That’s why a simple, clear instruction should always be included. Without context, heirs might be unable to restore access even if the keys exist.
Losing passwords by “over-hiding” them: Some people hide their seed phrase so well that nobody can find it anymore – not even the heirs. Overly complex hiding places or distributing words secretly across many locations greatly increase the risk that nobody will be able to piece everything together. The backup must be findable when it’s needed. Equally risky: if the only person who knows the hiding place dies together with the owner, secrecy becomes worthless.
Underestimating multisig or complex setups: Multisig and secret sharing are great tools – but only if everyone involved understands them. A mistake in the setup can make access impossible. Heirs must be able to handle such complexities. If not, a simpler strategy (e.g. a well-secured single seed) may be better. Technology should not become an additional obstacle.
Holding funds on exchanges: Anyone who leaves their bitcoin on a centralized exchange should be aware of the extra risks. The exchange might go bankrupt, get hacked, or freeze accounts. On top of that, heirs will have to deal with the platform’s support process. Many exchanges are not very efficient here, and it can take weeks to gain access. If the exchange is abroad, foreign laws may apply. If you still choose to use exchanges, all necessary login data (username, password, 2FA devices) need to be documented for the heirs.
Abuse of trust: Any method involving third parties (friends, notaries, service providers) carries a residual risk of misuse. A person with delegated authority could theoretically act behind your back while you are still alive. Think carefully about who you trust with what. Also, review your estate plan regularly. Life circumstances change – you may fall out with someone originally intended to help, or a service provider may shut down. Keep your plan up to date to avoid unpleasant surprises.

Final Thoughts

Inheriting bitcoin doesn’t happen automatically – without a clear plan, your heirs may lose everything.
You must consider both technology and law: access and legal entitlement need to be aligned.
Even the best technical setup is useless if nobody understands it – clear documentation and simple instructions for your heirs are essential.
Tools like multisig or time locks can make Bitcoin inheritance safer and more manageable when used thoughtfully.