Inheritance & self-custody: how people accidentally wreck their own estate plan
First: this is not legal advice. It’s practical, security-first best practice – the “how not to leave your heirs a puzzle box” version.
Self-custody has an awkward truth: if nobody can access your keys when you’re gone, your assets may as well not exist. But if you “solve” that by handing someone your seed phrase today, you’ve just created a very alive security problem. Inheritance planning is always a trade-off between recoverability and theft risk.
The pitfalls:
Putting secrets in the wrong place: Never put your seed phrase or passphrase in anything that might become public or widely shared (emails, cloud notes, family WhatsApp, shared drives). Also be careful with wills: depending on jurisdiction, probate can mean parts of the process become accessible beyond the people you intended. The goal is to avoid secrets ending up in “admin paperwork”.
If you need a refresher on what’s actually secret, read: Seed phrase vs passphrase.
“They have the seed, so they’re fine”: Not always. If you use a passphrase, the seed alone may recover an entirely different (usually empty) wallet. Typos don’t fail loudly – they create a new wallet. That’s great for security; terrible for heirs if you haven’t documented it clearly. Again, read: Seed phrase vs passphrase.
Leaving them a technical setup with zero context: Heirs don’t want a treasure hunt. They want a checklist. If your plan requires them to know what a derivation path is, you’ve made it fragile. If you’re using multisig, descriptors, PSBT, air-gapped signing… it can be brilliant – but only if it’s documented at the level of “do this, then this”.
Background reading:
One point of failure disguised as “a plan”: A single envelope in a single location is not a plan – it’s a single event away from failure (fire, flood, burglary, “tidying”, or simple loss). Paper is fragile. Metal is durable, but can be stolen. You’re balancing those risks, not eliminating them.
What a good inheritance plan looks like:
Separate “instructions” from “secrets”
Create a non-secret document that answers:
What assets exist (coins/networks), roughly where they are, and what wallet types are involved
Whether a passphrase exists (yes/no) and whether multisig is used
Where the physical items are stored (device, backups), without including the actual secrets
Who to contact (trusted technical friend, solicitor, executor) and what role they play
This document can live with your general estate planning, because it’s not the keys – it’s the map.
Store secrets in a way that matches your threat model
Common patterns people use:
Seed in durable form + passphrase stored separately (different location/custodian)
Sealed letter with the passphrase held by a solicitor/notary (or equivalent trusted escrow), while the seed backup is stored elsewhere
Multisig where no single person holds everything, so one compromised secret doesn’t drain funds (but this needs better documentation and regular maintenance)
If you’re still figuring out which complexity level is realistic, your own guidance applies: Which wallet type should I use?
Make “recovery” boring for someone else
Do a recovery drill yourself now, then write it down like you’re explaining it to a smart person who’s never done this:
What software to use, where to download it, and what “success” looks like
What to expect when restoring (e. g., “enter seed first, then passphrase”, “watch-only check first”)
How to verify they’re in the right wallet (addresses/balances, not vibes)
Avoid the two classic estate-plan own goals
“I’ll tell them later.” You won’t.
“They’ll figure it out.” They won’t – not reliably, not under stress.
For most people, the most robust baseline is:
One hardware signer for cold storage
A durable seed backup (ideally metal)
If you use a passphrase: store it separately and document clearly that it exists
A plain-language instruction sheet that your executor/heirs can follow
Not perfect. But recoverable. And recoverable beats “perfect on paper, lost in practice” every single time.
0 Comments