Could inheriting Bitcoin from love ones be that difficult?

[Wakate]

I have seen so many threads and topics about what happens to our Bitcoin when we are no more and if our Bitcoin asset can be transferred from one generation to the other. This is a serious topic we need to look into maybe we can consider a good alternative that can save us from total lose of our Bitcoin when we are dead. Based on my shallow knowledge on Cryptocurrency, I think If you don’t create a copy of that key and put that key in a safe place where the people that you trust can find it and know what to do with it, then the wealth that you’ve accumulated in crypto is just going to sit there. Could there be an advenaced way to get this done?

The nature of Bitcoin just like other cryptocurrencies that makes it complicated to pass down. Bitcoin is usually stored on the blockchain, a digital ledger that’s formed by a network of computers throughout the world that record transactions, including the exchange of Bitcoin. People usually make these transactions by using public and private keys. Public keys work like bank account numbers, and serve as an address that you can use to send other people crypto. Private keys work like passwords, and are made of unique, extremely long strings of characters that unlock your crypto. Unlike other types of passwords, however, private Bitcoin keys can’t be recovered once they’re lost or forgotten. That means that without those keys, people who are entitled to inherit their loved one’s Bitcoin won’t be able to get it.

We can always pass down assets that we already know and love like car, house, clothes etc and they are handled by law but with Bitcoin, it doesn’t really matter what the law says if you don’t actually have access to transfer those assets because there’s no formalized way to pass down Bitcoin, investors are coming up with their own sometimes bizarre protocols to guarantee that their heirs will get their digital assets. These plans can involve everything from locking their keys in secret lockboxes to hiring professional services to manage their crypto for their successors. But other crypto owners are still struggling with what to do, and have yet to find financial advisers who know much about crypto or who can even direct them to someone who does.

what happens to your Bitcoin later?

Families have been locked out of enormous fortunes because they couldn’t find their loved one’s keys. A man named Michael Moody was unable to unlock the Bitcoin that belonged to his son, Matthew Moody, who died in a plane crash in California. Matthew Moody was an early miner of bitcoin, which means his Bitcoin would be worth a lot of money today.

Technically, nothing. Again, Bitcoin is stored on the blockchain, so there’s a permanent record of it. That means your Bitcoin will exist as long as the blockchain exists, and regardless of whether you’re alive or dead. How your loved ones will be able to use that Bitcoin is a different question, one that largely depends on whether they know about it and if they know how to access it.

https://www.vox.com/recode/22971265/bitcoin-wills-estate-planning-cryptocurrency-nfts-death

[mk4]

I don't think there's an alternative to just leaving access to your keys; at least right now. Don't just leave the keys though, probably have a simple written instructions if your brother/mother/wife/etc doesn't know how to import keys into a new device and things like that.

A certain ethereum wallet called Argent has this "social backup" feature that is quite interesting (it's pretty much something like a multisig, but idk how it works at the back-end), but I'm not too much of a fan of.

[BlackHatCoiner]

I don't think there's an alternative to just leaving access to your keys

Of course and there is. Behold, steps for trustless inheritance:

• Create a seed phrase for your family.
• Derive an address.
• Create a transaction wherein you pay them the bitcoin.
• Set LockTime equal to a date in the future.
• Sign the transaction.
• Give them your signed transaction and the seed phrase.

If you've passed away before the specified locktime, your family can take the money by broadcasting the transaction once it's valid. If you're alive right before that time, spend the output and go back to step 3.

[Flexystar]

I don't think there's an alternative to just leaving access to your keys; at least right now. Don't just leave the keys though, probably have a simple written instructions if your brother/mother/wife/etc doesn't know how to import keys into a new device and things like that.

A certain ethereum wallet called Argent has this "social backup" feature that is quite interesting (it's pretty much something like a multisig, but idk how it works at the back-end), but I'm not too much of a fan of.

That’s interesting they already started working on something like this. Though it feels like they have not made this so called Argent feature out of family to family pass on feature. I still think that writing up the private keys and having back  ups with your close blood relation that is mother father or bro-sis has got no harm at all. Obviously that entirely depends on how your relationships have been. If no trust then just write up the codes with your lawyer in a will and stay safe. With the crypto currency’s gaining value everyone these  days started to posses one so this would be easier in the near future to circulate around the family.

[yazher]

It's really a waste when all of your assets will not be benefited by your loved ones after your death because they are the one who is worth having after you passed away. But the question is, how can we prevent such things to happen to our families where they have no idea how to claim our crypto assets? my answer is simple, you need to check first whether any member of your family can keep a secret and the most trustable ones will be the candidate whether you trust to him some partial details about your wallet, or choose to give him full access once you are gone.

[Zlantann]

Although its quit difficult to trust somebody in this present world. But recently I have started educating my wife about Bitcoin. Before now she taught I was just wasting my time on the forum since she was not seeing any financial benefit. She never knew that I was taking my time to learn and observe from the forum. Just yesterday I enlightened her about wallets. I showed her how much I have and how the market affects my account. I also taught her about passwords and keys. I showed her where I kept the password and keys and told her how to use them in case I am not around. For me she is trustworthy and can handle my finance for the good of the children when I am not around. I just want to make it easy for her because she might not be technically sound to go through any other complex process to retrieve or have access to my wallet.  

[KaliLinux]

I don't think there's an alternative to just leaving access to your keys; at least right now. Don't just leave the keys though, probably have a simple written instructions if your brother/mother/wife/etc doesn't know how to import keys into a new device and things like that.

A certain ethereum wallet called Argent has this "social backup" feature that is quite interesting (it's pretty much something like a multisig, but idk how it works at the back-end), but I'm not too much of a fan of.

That’s interesting they already started working on something like this. Though it feels like they have not made this so called Argent feature out of family to family pass on feature. I still think that writing up the private keys and having back  ups with your close blood relation that is mother father or bro-sis has got no harm at all. Obviously that entirely depends on how your relationships have been. If no trust then just write up the codes with your lawyer in a will and stay safe. With the crypto currency’s gaining value everyone these  days started to posses one so this would be easier in the near future to circulate around the family.

Just like the OP has mentioned, I too noticed this has been discussed several times in this forum, and investors are actually worried about this but some of us might not want to go too technical in this regard as @BlackHatCoiner explained and I think a simple sealed instruction with your wallet private keys with your lawyer for the family to be opened after that incident would be easier for some but somehow, this is something to be highly considered.  

[Coyster]

investors are actually worried about this but some of us might not want to go too technical in this regard as @BlackHatCoiner explained and I think a simple sealed instruction with your wallet private keys with your lawyer for the family to be opened after that incident would be easier for some but somehow, this is something to be highly considered.  

That would then mean you trusting your lawyer with your funds, that is not so much of an easy thing to do especially when the sum involved is a pretty large sum, coupled with the fact the the Bitcoin network is a 'trustless' one, it would of course be much better to 'trust' the network rather than an individual. IMO, it would be better to go with a trustless method, and even if i decide not to, i would rather give my keys/phrase to my spouse and siblings than leave it with someone outside of the family. But having said that, we all come from different families, thus it is still up to every individual to decide how they would want to go about this thing.

[bitzizzix]

These kinds of things I thought before and what I did was, the potential heir to my bitcoin or crypto if I die is my wife and as for my children I have taught my wife before how to transact in great detail.
and now if i need some bitcoins to do a transaction my wife does it, and previously there was a discussion for what and if memeng really need my wife to do it.
because my wife and I are both open to each other and need to know it and be able to do it for anything, and it all serves to complement each other.
I mean if when one of us can't do it for some reason, then one of us can do it.

[DaveF]

There is always the 2 of 4 multisig approach.
You have two the person inheriting has one, and whoever is in charge of your estate has 1.
This way you can always have security to send (since you have 2 of the 4) and the other 2 people can work it out according to your will.
If you know you are dying and just didn't get hit by a bus then you can give the person your keys and it's done.
Just like going to the safe and giving them bags of cash.

-Dave

[TheNineClub]

No, there shouldn't be any issue with BTC inheritance, but unless there is a will after a persons death, then it would be down to a countries specific laws, and then we get into the problem of government regulation of crypto, and that's where things get tricky.

[ranochigo]

Create a seed phrase for your family.
Derive an address.
Create a transaction wherein you pay them the bitcoin.
Set LockTime equal to a date in the future.
Sign the transaction.
Give them your signed transaction and the seed phrase.


If you've passed away before the specified locktime, your family can take the money by broadcasting the transaction once it's valid. If you're alive right before that time, spend the output and go back to step 3.

Perhaps a P2SH timelock or Multisig would be a more suitable alternative, broadcasting transactions and the handling of the data can be a little bulky. It'll be a bit of hassle to spend the coins at the same time because the signed TX would have to be re-generated every time a transaction is made.

I don't believe that there is a perfect way of doing so. There's multisig (ie. 2-of-3) but you'll always have to trust that the last key would only be revealed after your death. Transaction size of Multisig is probably a non-issue but I would have some doubts that certain parties won't collude to steal the funds, even if they are only stated to be revealed after death in the will.

[Marvell1]

investors are actually worried about this but some of us might not want to go too technical in this regard as @BlackHatCoiner explained and I think a simple sealed instruction with your wallet private keys with your lawyer for the family to be opened after that incident would be easier for some but somehow, this is something to be highly considered.  

That would then mean you trusting your lawyer with your funds, that is not so much of an easy thing to do especially when the sum involved is a pretty large sum, coupled with the fact the the Bitcoin network is a 'trustless' one, it would of course be much better to 'trust' the network rather than an individual. IMO, it would be better to go with a trustless method, and even if i decide not to, i would rather give my keys/phrase to my spouse and siblings than leave it with someone outside of the family. But having said that, we all come from different families, thus it is still up to every individual to decide how they would want to go about this thing.

In the case of bitcoin and crypto assets, I don't think it's safe for us to put our trust in strangers"lawyer". I don't know the process and procedures yet, but I find giving the key phrases/keys to outsiders is actually quite risky. I agree with you, I will teach my wife or kids about crypto and then I just give the private key/phrase to my wife. Sharing private keys with others is a very sensitive matter, but sharing with loved ones is still safer than with outsiders.

[sunsilk]

That is why it's better to teach your loved ones how to access wallets and with the entire crypto market.

It will give them the idea on what they should take care of and what are the essentials that they must do. You're not directly teaching them to inherit your crypto assets.

But you're giving them a new learning about this new fin-tech that everyone must have at least a background of it.

[Vaskiy]

That is why it's better to teach your loved ones how to access wallets and with the entire crypto market.

It will give them the idea on what they should take care of and what are the essentials that they must do. You're not directly teaching them to inherit your crypto assets.

But you're giving them a new learning about this new fin-tech that everyone must have at least a background of it.

Rather than giving them the passphrase to recover the wallet, it is good to educate them the way to access wallets. This will ease the process, and surely they'll look for the paper wallet backing secured on the family vault. I'm not sure about others, I've got a file that is being kept secure on the vault. This file carries every detail about the wallets. So, at any instance one can make use of it after my death in a much easier way.

[sheenshane]

I tend to agree above that timelock/locktime would be the best alternative solution when you pass away so that your family inherits your Bitcoin.
But the disadvantage is there's no specific time that they can able to use your Bitcoin because it's like a restriction mechanism that you can only spend Bitcoin with a specific date that you can set.  That's the problem there I think.

A private vault with a private key inside might be the best solution to inheriting your asset but you need this to trust them or it's better to find a trusted lawyer for this who will organize your wealth when you were passed away. 

If you've planned for this, it's better to teach them or give them awareness about crypto while it's early, so that it will not be difficult for them when they will inherit your Bitcoin.

[Charles-Tim]

I tend to agree above that timelock/locktime would be the best alternative solution when you pass away so that your family inherits your Bitcoin.

This should be a good option, but there are many other options that can be followed.

Another option is Shamir secret sharing means of encryption. Shamir secret sharing can be used to encrypt a private key, a seed phrase or words, letters or characters that you want to encrypt. Encrypt the seed phrase or private key into M-of-N secrets. Having M shares out of N secrets will construct the encrypted seed phrase or private key.

Another is the use of M-of-N multisig wallet.

But, above all, in this regard, your family needs to know how to go about this, they have to be very conversant with the technical aspects of wallet setup and the right way to go for the recovery.

[o_e_l_e_o]

It'll be a bit of hassle to spend the coins at the same time because the signed TX would have to be re-generated every time a transaction is made.

I don't see this as an issue. The bulk of my coins are in cold storage, and I transact with them maybe once or twice a year. If I'm using a timelocked set up, I probably don't want the timelock much more a year in advance or else my family might be waiting a long time to access my coins, right when they need them the most.

but I would have some doubts that certain parties won't collude to steal the funds, even if they are only stated to be revealed after death in the will.

All the more reason to use a timelocked set up.

But the disadvantage is there's no specific time that they can able to use your Bitcoin because it's like a restriction mechanism that you can only spend Bitcoin with a specific date that you can set.  That's the problem there I think.

You can set any time you like to be the maximum amount of time they have to wait, and just invalidate and renew the timelocked transaction a few weeks before the specified date. A year, 6 months, 3 months, whatever you want.

Another option is Shamir secret sharing means of encryption.

I wouldn't recommend this for a variety of reasons: https://blog.keys.casa/shamirs-secret-sharing-security-shortcomings/

If you want to split and distribute in an m-of-n type system, then multi-sig is superior.

[bittraffic]

Just simply give the seep phrase to your trusted family member or wife. But of course you need to make sure they already know how to use the wallets or import a seed. Easier that way. I'm curious about that setting a locktime to future date, it must be an option than having a 3rd party.

What I'm worried is  that if you have a kid and the person you gave the seed is not worth trusting after getting your seed.  Your kid doesn't get anything. So its best to prepare for it while you are still alive. 

[sunsilk]

That is why it's better to teach your loved ones how to access wallets and with the entire crypto market.

It will give them the idea on what they should take care of and what are the essentials that they must do. You're not directly teaching them to inherit your crypto assets.

But you're giving them a new learning about this new fin-tech that everyone must have at least a background of it.

Rather than giving them the passphrase to recover the wallet, it is good to educate them the way to access wallets. This will ease the process, and surely they'll look for the paper wallet backing secured on the family vault. I'm not sure about others, I've got a file that is being kept secure on the vault. This file carries every detail about the wallets. So, at any instance one can make use of it after my death in a much easier way.

I haven't done that yet and I don't think that I'm on that part.

But I'm trying to educate them on how to do things like making their own wallets, keeping the seed phrases and almost everything that I know. As for now, they're not interested because I haven't given them a small amount to keep.

Someday, they'll remember that when I'm gone and all the things that I've thought them about wallet creation, how to send and receive and how to import the private keys.