Self-custody of your bitcoins gives you numerous advantages in using the protocol, but it also involves some responsibility. If you have your keys, you are solely responsible for your bitcoins. Measures should then be put in place in order to mitigate the risks of losing them.
Among these measures, there is the technical inheritance plan. This document, too often overlooked by users, is essential to ensure that your bitcoins are not lost in the event of a problem.
In this article, we explain everything you need to know about the Bitcoin technical inheritance plan.
What is a Bitcoin inheritance plan?
A Bitcoin inheritance plan is a technical document that allows your loved ones to regain access to your bitcoins in the event of a problem. It is absolutely essential to have this process in place, even if you are currently young. Indeed, an accident can happen quickly, and it would be a shame to lose all your satoshis, which have been difficult to accumulate over the years.
This document should be separated from the administrative aspect of inheritance. I am not going to give you legal advice, since it is not my job, but only technical advice. The document I am about to tell you about therefore has no legal value.
Obviously, you should not write your 24 words directly on this document. The inheritance plan is used exclusively to provide information in order to facilitate recovery, but it should not intrinsically allow for recovery.
A technical inheritance plan should have several parts. First of all, it is worth recalling in the introduction to this one the best practices to follow so that your loved ones do not lose the bitcoins during their recovery manipulations.
You can also detail what you want them to do with your bitcoins. Can they sell them? Do they have to “hodl”?
Next, you should give them a list of trustworthy people to contact in order to help them recover the wallet. If your loved ones are not computer savvy, you can write them the name and phone number of a trusted friend who understands the mechanisms involved.
The body of your inheritance plan should give information on the keys to unlocking the bitcoins:
What type of wallet do you use?
How many bitcoins are associated with it?
What is the support of the wallet? Where is this support located? How do I find the unlock Pins?
Does the wallet have a passphrase? If yes, where is it stored?
What is the location of the backups of the recovery phrase (24 words)?
Where is the password for the management software located?
This chart is an example that you should adapt to your situation. You don't have to give out that much information. It is up to you to determine what information you can share in this document, without unreasonably reducing the security of your wallets.
Finally, in the last part of the document, you can detail each step in order to regain access to bitcoins. In this section, you should specify what your loved ones will need. You can also imagine scenarios based on the situation. For example, you can give a process to follow if your loved ones still have access to your computer, and another process if they no longer have access to it.
Obviously, this document alone will not be very effective if you have not previously educated your loved ones how to use Bitcoin. It is therefore important to review the inheritance plan with them, and explain to them the process to follow in case of problems.
How do you secure a Bitcoin inheritance plan?
In any case, an inheritance plan always represents an additional attack vector on your security method. Since it provides information about your portfolio, it necessarily increases the risk of your funds being stolen. However, if you do not produce this document, you increase the risk of losing your bitcoins. Again, the strategy for securing Bitcoin is just a question of balancing the risk of loss and the risk of theft. You need to determine what information you want to disclose in your inheritance plan based on your personal circumstances.
It is often advisable to draw up this inheritance plan in writing, directly on a piece of paper. An interesting strategy would be to store your inheritance plan in a sealed envelope. So you could verify for yourself that no one had access to this sensitive information during your lifetime.
In addition, you will need to update this document as your security strategy evolves. I therefore advise you to open your inheritance plan regularly in order to check that it still meets your expectations, and that it still provides the right information on your various Bitcoin wallets.
Completing a technical inheritance plan is an essential step in the self-custody of your bitcoins. It allows your loved ones to regain access to your funds if something ever happens to you.
If you want to study bitcoin inheritance in more detail and find a template document, I advise you to look The video of Discover Bitcoin on this subject, or to read the book Cryptoasset Inheritance Planning: A Simple Guide for Owners by Pamela Morgan.
