Emergency Planning and Inheritance
Emergencies happen. A simple, written plan can save your bitcoin if a phone is lost, a device fails, a home is robbed, or you pass away. Keep it clear, test it with small amounts, and make sure trusted people know what to do.
Plain‑English definitions:
- •Emergency kit: A short set of instructions + where the backups are.
- •Letter of instruction: A document that explains, in simple steps, how to access funds without revealing secrets in the letter itself.
- •Executor: The person handling your affairs after death.
- •Beneficiary: The person who should receive the funds.
- •Recovery phrase (seed): 12–24 words that recreate the wallet.
- •Passphrase (25th word): Optional extra secret; seed + passphrase = different wallet.
- •Multisig (M‑of‑N): Spending needs M signatures out of N keys.
- •Time‑lock: A rule that prevents spending until a certain time.
Your 1‑page emergency plan (checklist):
1) Who to contact: Names + phone/email of 1–3 trusted people. 2) What you have: “Hardware wallet + mobile wallet,” not balances. 3) Where backups are: Location hints only (e.g., “Home safe (top shelf), Bank box #123”). 4) How to restore: “Use hardware wallet → Restore from seed → Verify receive address on device.” 5) Test step: “Before moving any large funds, send/receive $5 first.” 6) Legal: “Executor and attorney are allowed to open safe/box.” 7) Security note: “Never type the seed into a website or share it with anyone—including support.”
Simple inheritance patterns (pick one):
- •Single‑sig with passphrase: Seed in one place, passphrase in another. Executor gets both via will/letter.
- •2‑of‑3 multisig: Give 3 separate keys/backups to different locations/people (e.g., Home safe, Bank box, Attorney). Any 2 can recover.
- •Time‑delayed backup: Keep primary wallet; store a backup that can only spend after a date (CLTV/CSV—advanced; use reputable tools).
What to give people (without leaking funds):
- •Executor/attorney: The recovery process, not the secrets.
- •Trusted cosigner(s): Their own seed/passphrase only.
- •Beneficiaries: A plain explanation of who to contact and how the process works.
Keep seeds/passphrases separated; never put all pieces in the same envelope or location.
Where to store things (separate, labeled discreetly):
- •Seed phrase: Fire/water‑resistant medium (metal if possible).
- •Passphrase (if used): Different sealed container/location.
- •Descriptor/cosigner data (for multisig): Printed or on an offline USB with checksum; store away from seeds.
- •Locations: Two or three different places (home safe, bank box, trusted attorney).
- •Access: Make sure executor can legally open the locations (add to will/estate docs).
Letter of instruction (template):
1) Open the hardware wallet manual. Choose “Restore from recovery phrase.” 2) Enter the 12–24 words from Location A (see envelope label). 3) If instructions mention a passphrase, enter the exact passphrase from Location B (case/spaces matter). 4) Open the wallet app, verify the receiving address on the device screen. 5) Perform a $5 test receive and a small test send out. 6) After success, proceed with the amounts listed in the will/estate documents.
Example locator note (do not include the seed itself):
— “Seed A: Home safe, file labeled ‘Documents—December’, second sleeve.”
— “Passphrase B: Bank box #123, brown envelope ‘Travel Receipts’.”
— “Multisig descriptor: With attorney (contact in phone ICE card).”Multisig for families (2‑of‑3 quick guide):
- •Devices: Three different hardware wallets (ideally mixed brands).
- •Backups: Each seed stored separately; consider metal for long‑term.
- •Map: Write a simple map: “Savings Wallet is 2‑of‑3: Keys at Home Safe / Bank Box / Attorney.”
- •Recovery: Any two locations can recover funds following the letter of instruction.
- •Rotation: If a cosigner changes (e.g., attorney retires), move funds to a fresh 2‑of‑3 and update documents.
Common mistakes (avoid):
- •Putting the seed and passphrase together.
- •Storing everything in one location (fire/flood risk).
- •Unclear instructions (tech jargon, missing steps).
- •Never testing the recovery steps.
- •Sharing the seed or passphrase with “support” or strangers.
Regional/legal notes (keep it simple):
- •Work with an estate attorney in your country/state to reference your recovery process without exposing secrets in the will.
- •Name trusted people (executor/cosigners) and grant them access to safes/boxes.
- •Keep a printed list of important accounts (email, exchange, phone carrier) and how to lock them in emergencies.
Emergency actions (loss/theft):
- •Lost phone/hot wallet: Move funds ASAP using hardware wallet backup.
- •Suspected seed exposure: Sweep funds to a new wallet with a brand‑new seed.
- •Stolen hardware wallet: Funds are safe if PIN/passphrase are unknown—still move to a fresh wallet to be sure.
- •SIM‑swap risk: Lock carrier account; enable authenticator‑app 2FA for exchanges and email.
Test Your Knowledge
This lesson includes a 5-question quiz (passing score: 75%).
Quiz functionality available in the mobile app.