Crypto is unusual: a perfect security setup can also lock out your family. This guide shows how to do both. It is part of our guide to crypto inheritance and recovery. It is general information, not legal advice.
- STEP 01List
Record what you hold and which wallets, with no secrets.
- STEP 02Store
Keep the backup secure, and record where it is kept.
- STEP 03Explain
Write plain instructions for a non-technical reader.
- STEP 04Test
Walk through the plan, then review it every year.
The problem
| If your plan is… | The risk |
|---|---|
| Nothing | Your funds are lost forever |
| Phrase in your will | It may become public |
| Phrase given to family now | They could spend it, or lose it |
| Phrase hidden, known only to you | Nobody finds it |
| Too complex | Heirs get lost, or scammed |
The core idea: separate the pieces
Your family needs three things, which should not be in one place:
- Knowledge that the crypto exists, and instructions on what to do. See the inheritance letter.
- Access to your backup, stored safely.
- Authority, through your will and executor. See crypto in a will.
Options to consider
| Method | How it works | Good for |
|---|---|---|
| Letter and sealed backup | Letter says where the backup is | Most people |
| Backup with a lawyer | Sealed, never opened | People who trust a professional |
| Split trust | A passphrase with one person, and the phrase with another | Careful holders |
| Shamir shares | Family hold shares | Those who want to spread risk |
| Multisig | Family hold keys | Larger holdings |
| Exchange or custodian | Handled like a bank account | Simple cases |
Steps to take
- List what you hold, without any secrets.
- Choose a method that your family can actually follow.
- Write the letter.
- Store your backup and letter separately.
- Tell your executor that a plan exists.
- Review it every year, through a health check.
Think about your heirs
Would your partner or child be able to follow it, while grieving? Could they be tricked? They will be a target for scammers. Tell them that nobody genuine will ever ask for the phrase, and to take their time. Our guide for family members inheriting crypto is written for them, and you could include a link to it in your letter.
Test it
Ask someone you trust to walk through your instructions, without any real secrets involved. If they get stuck, simplify. Avoid any arrangement that relies on one person being available.
Your wider digital life needs a plan too. See digital legacy plans.