# What would I do with Bitcoin in my will?



## Firefly (3 Jan 2018)

Hi,

Another question if I may and this relates to the concept of Bitcoin being a store of value. How do I pass on my Bitcoins to my next of kin? With cash, shares, property and most other assets I can put them into my will and upon death my solicitor can divvy out the goodies. As much as I like my solicitor I would never send him my Bitcoin wallet details as, given the nature of Bitcoin, he could very well siphon off my coins in a few minutes and I would have a hard time even proving he did it. I trust my family more than my solicitor but what's stop one of them doing the same? What If I too lose my marbles and cannot for the life of me remember my account/password details? What happens then? What happens to these coins that don't end up belonging to anyone?

Firefly.


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## ant dee (3 Jan 2018)

Firefly said:


> How do I pass on my Bitcoins to my next of kin?


Off the top of my head, you could set up what is called a MultiSig wallet.
For example, it could have 3 private keys, and at any time 2 would be required to sign a transaction. You keep one, your solicitor another and your next of kin (executor?) the third.
You could complicate things more by further encrypting the private keys and giving the encryption keys to some other trusted party.
In the end I believe you do have to trust that the whole group of trusted parties won't conspire and steal from you...
There is interest in this subject and more solutions will be created, if they have not already.

In case of forgotten / lost private keys, bitcoin will remain dormant indefinitely. In other words bitcoin is lost.


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## Firefly (3 Jan 2018)

ant dee said:


> Off the top of my head, you could set up what is called a MultiSig wallet.
> For example, it could have 3 private keys, and at any time 2 would be required to sign a transaction. You keep one, your solicitor another and your next of kin (executor?) the third.
> You could complicate things more by further encrypting the private keys and giving the encryption keys to some other trusted party.
> In the end I believe you do have to trust that the whole group of trusted parties won't conspire and steal from you...
> ...



Not being smart, but what happens if my solicitor loses the password? He won't know he has lost it until he goes looking for it which will be when I buy the farm.
What happens then?

With a standard will, my solicitor can lose his but it doesn't matter, herself can have a copy and anyone else for that matter, because it is worthless until I am dead. Unless I have a very complicated estate it will all go to my family anyways.

With Bitcoin I am relying on my solicitor to have good record keeping, this MultiSig wallet you mention being around in 40-50 years time (hopefully), my wife (if she outlives me) being versed in Bitcoin transactions and this MultiSig wallet etc.

Do you really think estate planning which relies on Bitcoin as a store of value is feasible?

Firefly.


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## Galway21 (3 Jan 2018)

You could be doing your beneficiaries a great dis-service given the great volatility of its value.  At probate, the market value of your bitcoin could be €1 million, but by the time it sold its market value might be only €10,000, leaving your beneficiaries with a €330,000 CAT bill to pay, but no funds!


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## ant dee (3 Jan 2018)

Firefly said:


> Not being smart, but what happens if my solicitor loses the password? He won't know he has lost it until he goes looking for it which will be when I buy the farm.
> What happens then?
> Firefly.


I would imagine if 2 out of 3 of the keys are lost, the bitcoin is lost.
As for the technology getting outdated, I doubt that can happen. Anyway you would make at least annual audits of your backup plans would you not?
You can have a fast read here
https://coinjournal.net/7-steps-estate-planning-bitcoin-digital-assets/

Now, what you appear to be really looking for is some kind of institutional and government reassurance am I correct? And this pushes us away from the bitcoin 'be your own bank' mentality.
I guess a custodial service like Coinbase could handle this  but I can't see who would
a) Leave Bitcoins in their will
AND
b) Leave those Bitcoins on a third party custodial service.




Galway21 said:


> You could be doing your beneficiaries a great dis-service given the great volatility of its value.  At probate, the market value of your bitcoin could be €1 million, but by the time it sold its market value might be only €10,000, leaving your beneficiaries with a €330,000 CAT bill to pay, but no funds!


If that is accurate it is a flaw of the inheritance and CAT system, and not a flaw of Bitcoin.
If you get €1m of Ryanair shares at probate, 3 flights crash the next day and the value drops to €10k, do you still have to pay €330,000 CAT bill?


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## fpalb (3 Jan 2018)

It's a good question, I think up until now people were generally more concerned about whether bitcoin would be around next year than worrying about estate planning for decades ahead. ant dee has already given good responses, I'll add that multi-sig functionality is native to bitcoin itself, it's just not a feature provided by a company or a specific wallet, so it will be around for as long as bitcoin is. How you leverage that to protect your coins is up to you, the lengths you need to go to might depend on how many people you really trust, how much btc you have etc. You get to choose how many keys there are (the limit is 16 I think) and how many are required, If you create a multi-sig wallet that is 4 of 7 for example, you can afford to lose any 3 of the keys.
You could also use other techniques such as dead man's switches or time-locked transactions (which are also natively supported). It's for sure not straightforward to have a fool proof plan, but it's also flexible, you don't need to involve solicitors at all if you don't want to for example.


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## Duke of Marmalade (3 Jan 2018)

ant dee said:


> If that is accurate it is a flaw of the inheritance and CAT system, and not a flaw of Bitcoin.
> If you get €1m of Ryanair shares at probate, 3 flights crash the next day and the value drops to €10k, do you still have to pay €330,000 CAT bill?


That is not a fair comparison.  Your family home could also be hit by one of those crashes.  _Galway _makes a good point but it is really just an example of the general consensus that currently bitcoin is a terrible store of value.  As I asked before, who is saving for a deposit on a house in bitcoin?


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## fpalb (3 Jan 2018)

Duke of Marmalade said:


> As I asked before, who is saving for a deposit on a house in bitcoin?


Off topic, but this is a very funny question to ask any long time bitcoiner.


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## Firefly (3 Jan 2018)

ant dee said:


> I would imagine if 2 out of 3 of the keys are lost, the bitcoin is lost.
> As for the technology getting outdated, I doubt that can happen.


I would say the technology is outdated already! If it keeps going at this rate we will probably need to burn the Amazon rainforest to keep mining!



ant dee said:


> Anyway you would make at least annual audits of your backup plans would you not?


What about if I am not able to? What if the marbles start to get a bit loose. What happens then? I could easily just forget my password



ant dee said:


> Now, what you appear to be really looking for is some kind of institutional and government reassurance am I correct? And this pushes us away from the bitcoin 'be your own bank' mentality.


Not really. I am asking how can I pass on my bitcoins to my next of kin in any way that resembles a standard will.



ant dee said:


> I guess a custodial service like Coinbase could handle this  but I can't see who would
> a) Leave Bitcoins in their will
> AND
> b) Leave those Bitcoins on a third party custodial service.



I agree. Coinbase could be gone next year, and I would certainly expect them to be gone in 30 years time. And with them goes my keys.


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## Firefly (3 Jan 2018)

fpalb said:


> It's a good question, I think up until now people were generally more concerned about whether bitcoin would be around next year than worrying about estate planning for decades ahead. ant dee has already given good responses, I'll add that multi-sig functionality is native to bitcoin itself, it's just not a feature provided by a company or a specific wallet, so it will be around for as long as bitcoin is. How you leverage that to protect your coins is up to you, the lengths you need to go to might depend on how many people you really trust, how much btc you have etc. You get to choose how many keys there are (the limit is 16 I think) and how many are required, If you create a multi-sig wallet that is 4 of 7 for example, you can afford to lose any 3 of the keys.
> You could also use other techniques such as dead man's switches or time-locked transactions (which are also natively supported). It's for sure not straightforward to have a fool proof plan, but it's also flexible, you don't need to involve solicitors at all if you don't want to for example.



I agree and in fact it sounds extremely complicated for the average person to get right and very easy to get wrong.

If I cannot easily pass an asset on to my next of kin then it fails a very basic test to me which is that it is a store of value.

In my opinion the only way I can agree that it is a store of value is if used temporarily, i.e. it is bought with FIAT and immediately used to buy something else.


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## ant dee (3 Jan 2018)

Firefly said:


> I am asking how can I pass on my bitcoins to my next of kin in any way that resembles a standard will.


Let me try a different approach.
In a standard will, the courts and the government will ensure its execution correct? Your next of kin will not get any of your assets before you die, authorities will make sure of that.
Because the authorities have control over all of our assets. In the event of a fraud or a crime they can freeze them even confiscate them.

But noone has that control over your bitcoin, for better or worse, and this is where estate planning is (depending on each ones point of view) lacking.

Until, maybe, someone very smart comes along and creates code to make bitcoin estate planning resemble a standard will.


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## ant dee (3 Jan 2018)

Duke of Marmalade said:


> That is not a fair comparison. Your family home could also be hit by one of those crashes. _Galway _makes a good point but it is really just an example of the general consensus that currently bitcoin is a terrible store of value.


In any case, it is up to the receiver of the inheritance to accept a volatility risk or not.
Surely an arrangement can be made with the Revenue, saying that the receiver will sell the bitcoin at an exchange straight away and be taxed at the € profit he receives.

Isn't that what happens when someone states in their will for their house to be sold after their death?


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## Leo (8 Jan 2018)

Firefly said:


> What about if I am not able to? What if the marbles start to get a bit loose. What happens then? I could easily just forget my password



Then your Bitcoin join the 20+% of bitcoin already lost forever. 



ant dee said:


> Until, maybe, someone very smart comes along and creates code to make bitcoin estate planning resemble a standard will.



If such a mechanism ever comes into existence, the next step will be cyber criminals exploiting it to steal bitcoin.


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## Firefly (8 Jan 2018)

Leo said:


> Then your Bitcoin join the 20+% of bitcoin already lost forever.
> If such a mechanism ever comes into existence, the next step will be cyber criminals exploiting it to steal bitcoin.



I cannot therefore see how Bitcoin can be a store of value unless used temporarily, i.e. it is bought with FIAT and immediately used to buy something else.


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## ant dee (8 Jan 2018)

Leo said:


> If such a mechanism ever comes into existence, the next step will be cyber criminals exploiting it to steal bitcoin.


I don't understand this to be honest. The 'very smart' part would be that it won't be exploitable. Like a public wallet address with 1000btc is not exploitable now unless you know the private keys.

It will not be centralised, there will be no single point of failure to target and empty all the 'bitcoin wills'.
Code developers take all this into consideration, we are not talking about creating a centralised company called 'Coinbase Wills' that controls a big honeypot.

Cyber criminals already have centralised targets to attack and do so non stop. All that it does for the end-user is increased security.


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## Leo (8 Jan 2018)

ant dee said:


> I don't understand this to be honest. The 'very smart' part would be that it won't be exploitable. Like a public wallet address with 1000btc is not exploitable now unless you know the private keys.
> 
> It will not be centralised, there will be no single point of failure to target and empty all the 'bitcoin wills'.
> Code developers take all this into consideration, we are not talking about creating a centralised company called 'Coinbase Wills' that controls a big honeypot.
> ...



So what process or solution are you proposing that would allow a third party with no access to the original owner's private keys to claim or transfer ownership of another user's bitcoin? I just don't see how that couple be possible and verifiable without being wide open to exploitation.


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## jman0war (8 Jan 2018)

Firefly said:


> I agree and in fact it sounds extremely complicated for the average person to get right and very easy to get wrong.
> 
> If I cannot easily pass an asset on to my next of kin then it fails a very basic test to me which is that it is a store of value.
> 
> In my opinion the only way I can agree that it is a store of value is if used temporarily, i.e. it is bought with FIAT and immediately used to buy something else.


Put your bitcoins on a hardware wallet.
Store the password and backup phrase in a safe, or in a safe deposit box at a bank.
Keep said Safe combination, or key to the deposit box with your custodian of choice.

It would be the same for any digital ownership really.

How do you plan on transferring ownership of your cloud based email, your facebook or the www domains you own?


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## Firefly (8 Jan 2018)

jman0war said:


> How do you plan on transferring ownership of your cloud based email, your facebook or the www domains you own?



Any important emails that I need my family to have access to are copied to their own email addresses so either these are all hacked or Google is down forever (in which case I won't be alone). 

The most important things in the cloud for me are those which have no financial value - family photographs & videos. For these, I back up to my PC, to my cloud provider and to 3 separate external hard drives. Belt & braces and all that!

I don't own any domains and I don't use Facebook or any other "social" media.


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## ant dee (8 Jan 2018)

Leo said:


> So what process or solution are you proposing that would allow a third party with no access to the original owner's private keys to claim or transfer ownership of another user's bitcoin? I just don't see how that couple be possible and verifiable without being wide open to exploitation.


Well, like i said before, there is none, until someone very smart figures it out!

With the current cryptography tools you could split your keys, encrypt them further, store parts in a safe deposit box or a lawyer or whatever you want.
You can keep enough to be able to access the bitcoins yourself,  and require every one of the other parts to work together to access them without you.


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## jman0war (9 Jan 2018)

It would open a major attack vector so will never occur in Bitcoin.

If one requires a cryptocurrency that offers custodial services and a centralised system including a trusted 3rd party, look elsewhere.


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## Leo (9 Jan 2018)

ant dee said:


> Well, like i said before, there is none, until someone very smart figures it out!



As jman0war points to above, providing a systematic means of transferring ownership of anything secured by an individual's private key opens the whole system up to attack. Bitcoin by design deliberately excludes external trust authorities, there is no record of ownership, let alone a means of contacting owners to validate any transfer is legitimate would leave it wide open. Providing a systematic approach would require an overhaul of how bitcoin works that would be strongly resisted.

The FADAA legislation in the US provides a framework for the transfer of digital assets on death, and sets out the level of detail and proof an executor needs to provide in order to take over ownership of these assets, but such a system only works where the current holder of the assets have verified the identity of the original owner. Bitcoin offers relative anonymity, and no such identity verification. Some of the wallet providers will transfer ownership of assets they are holding under the above legislation in certain circumstances, but they will not publicly release details of the mechanism for fear that it will be exploited.  




ant dee said:


> With the current cryptography tools you could split your keys, encrypt them further, store parts in a safe deposit box or a lawyer or whatever you want.
> You can keep enough to be able to access the bitcoins yourself,  and require every one of the other parts to work together to access them without you.



So you're back to just passing on your private key, which is a very different proposal from a systematic solution implemented in code. There are many existing methods to do just that, each with their own issues. If you go down the key-splitting route, make sure there are fail-safes built-in to your approach, with no one individual the sole holder of one piece of the puzzle. A chain such as that just requires a single failed link to render the key unrecoverable. Even an article on bitcoin.com suggests the best way to bequeath bitcoin is to write down all the information, including your credentials!


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## fpalb (9 Jan 2018)

Leo said:


> So you're back to just passing on your private key, which is a very different proposal from a systematic solution implemented in code. There are many existing methods to do just that, each with their own issues. If you go down the key-splitting route, make sure there are fail-safes built-in to your approach, with no one individual the sole holder of one piece of the puzzle. A chain such as that just requires a single failed link to render the key unrecoverable.



Just to be clear though, if you're using a multi-sig wallet (as opposed to splitting a single key among different people) you CAN afford to lose some of the keys, the exact number depending on how you've set up the wallet.


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## Leo (9 Jan 2018)

fpalb said:


> Just to be clear though, if you're using a multi-sig wallet (as opposed to splitting a single key among different people) you CAN afford to lose some of the keys, the exact number depending on how you've set up the wallet.



Good point. Different to splitting the key, but a better solution.


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## ant dee (9 Jan 2018)

Allright, lets just forget about my imaginary-brilliant-code.

We are back to custodial services.
Coinbase says on their website that all crypto-assets are insured.

So, in theory, if Coinbase_Wills was launched, insured by AXA would we not have a decent product?
Insurance companies insure each other correct? So even if AXA went bust, other insurance companies would step in to honour the claims?


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## Leo (9 Jan 2018)

Coinbase already provide a mechanism for the transfer of wallets they hold on proof of death of the original owner and on provision of the necessary probate documentation. Their  are likely easier for a US resident to meet, but shouldn't be insurmountable for people outside that market. The challenge is really related to bitcoin held privately outside of an exchange.


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## ant dee (9 Jan 2018)

And what a challenge it is.
Let us define it.
Feel free to help defining the challenge.

Btc_guy wants to:

hold bitcoin privately, outside any custodial services. Keep total control of the keys to himself.
make sure his next-of-kin gets control of his bitcoin when (and only when!) he kicks the bucket.
make sure he can get help accessing his bitcoin in case of memory loss.

He can't have it all can he? 
Unless he gives control of his assets to the government (who ultimately control all our assets) how can he expect to have the government protect his assets from his evil next-of-kin and his corrupt estate lawyer?

He can give custody to a properly regulated and insured institution (assuming there is one). Then he can enjoy the same peace of mind other people with wills do.

He can make use of a multisig wallet, keep enough keys to have access for himself and distribute extra keys to trusted parties, his next of kin, his estate lawyer. 
How many keys? No simple answer to that, he has to weigh the pros and cons.

There is also the option to use further encryption and/or safe deposit boxes. Grant access to a trusted person only after death. Though we are now starting to slide more back to the custodial territory.


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## Leo (10 Jan 2018)

ant dee said:


> Let us define it.



And that's a great idea, would make a great Key Post. We can trash it out here and perhaps get a few more to contribute ideas on the best strategy for the various use cases and then move the result to a new thread. There are likely a good few reading these threads that may be holding significant assets they need to plan for.


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