In short
For most people a well-kept seed phrase plus a clear letter of instruction is enough. Multisig and timelocks are stronger but mostly limited to Bitcoin, and harder to explain. Paid services trade money and some privacy for someone to hold your heirs’ hand.
The options at a glance
| Method | Works for | Setup effort | Easy for heirs? | Third party involved |
|---|---|---|---|---|
| Exchange account + paperwork | Anything the exchange lists | None | Yes, but slow | The exchange |
| Single wallet + letter + sealed seed | Any coin | Low | Fairly | None |
| Multisig with a trusted keyholder | Mainly Bitcoin (Safe for Ethereum) | High | Harder | A person you choose |
| Timelocked recovery key | Bitcoin | Medium to high | Harder | None |
| Paid inheritance service | Bitcoin, some also Ethereum and stablecoins | Medium | Yes, with support | The company |
1. Leave it on an exchange
The simplest method is to do nothing special. The exchange holds the keys, and after your death your executor files a claim with a death certificate and proof of their authority. See Claiming from an exchange account for what that involves.
Good for: small amounts, and people who will never manage a wallet themselves.
Watch out for: exchange failure and account freezes. Also, Coinbase, Kraken and Gemini don’t let you name a beneficiary on a personal account, so the claim goes through the estate. It takes weeks to months.
2. One wallet, a letter and a sealed seed
You keep crypto in your own wallet, ideally a hardware wallet. The seed phrase sits somewhere secure, and a letter of instruction tells your heirs where it is and what to do with it.
Good for: most people with a meaningful amount in self-custody.
Watch out for: the seed is a single point of failure. Anyone who finds it can take everything, and if it’s lost or destroyed, so are the coins. Store it on metal rather than paper, keep it away from the letter itself, and test your instructions (see the yearly check-up).
Don’t cut your seed phrase in half
Splitting 24 words into two sets of 12 and hiding them in two places is a common idea, and a bad one. Whoever finds one half has much less left to guess, and there are tools that brute-force missing seed words. Every word an attacker knows makes the rest easier. And losing either half locks everyone out. If you want a backup in parts, use a scheme built for it, such as the multi-share backup on Trezor devices, or use multisig.
3. Multisig with someone you trust
A multisig wallet needs several keys to move coins, for example two out of three. You keep two keys; a lawyer, relative or executor keeps the third. On its own, their key can’t move anything. After your death, your heirs combine it with one of yours.
Good for: larger Bitcoin holdings, and people who already use or want a multisig.
Watch out for: it’s harder to set up and much harder to explain. The heirs also need the wallet configuration file, not just the seeds. For Ethereum, the Safe smart-account wallet offers something similar. More in Multisig inheritance.
4. A timelocked recovery key
Some Bitcoin wallets let you add a key that only starts working after the coins have sat unmoved for a set time, say a year. You give that key to your heir. As long as you’re around, you “refresh” the wallet before the timer runs out and the heir’s key stays useless. If you die, the timer runs out and the heir can move the coins.
Good for: Bitcoin holders who want no third party and are happy to do a yearly refresh.
Watch out for: forgetting the refresh means your heir can take the coins while you’re alive. With Liana-style relative timelocks the delay can’t be longer than about 15 months; other wallets use a fixed date that you postpone by moving to a new wallet. More in Timelocked recovery keys.
5. A paid inheritance service
Companies such as Casa, Unchained and Nunchuk hold one key of a multisig and have a procedure for heirs. Some add a waiting period during which you can block a false claim.
Good for: people who want a professional to guide their heirs and are fine paying a yearly fee.
Watch out for: you depend on the company still being around and pay every year. They also know who you are and roughly what you hold. Compared in Paid inheritance services.
Mixing methods
These aren’t exclusive. Plenty of people keep spending money on an exchange, savings in a hardware wallet with a sealed seed, and a larger amount in a multisig. Your inventory lists all of it; the letter explains each one.
Which one should you pick?
A rough rule, not advice:
- Less than you’d spend on a holiday: an exchange, and make sure it’s on your inventory.
- A meaningful part of your savings: a hardware wallet, a metal seed backup and a letter of instruction.
- A large amount in Bitcoin: consider multisig or a timelock, and test the recovery with the person who’d have to do it.
Whatever you pick, the letter of instruction is next.