Navigating #bitcoin inheritance:
1/ Bitcoin has become a significant asset, prompting the need to plan its inheritance. This thread explores two approaches: self-custody (cypherpunk way) and self-custody with third-party assistance. 💰
2/ Self-Custody - Cypherpunk Way: Start by setting up a self-custody plan. This involves owning and maintaining private keys using a physical hardware wallet. It's not connected to the internet for enhanced security. 🔒
3/ Creating a Wallet: Acquire a hardware wallet after due diligence. Back up your wallet using a Shamir secret share, a secure way to split and store your seed, minimizing the risk of a single point of failure. 🌐
4/ Passphrase Protection: Use a passphrase for an extra layer of security. It's a separate layer from the seed and PIN, providing protection even if the seed is compromised. Make it long and don't lose it. 🔐
5/ Metal Plate Solutions: Safeguard your seed on metal plates for longevity. Select secure locations to store them, minimizing risks like theft or damage. Metal solutions enhance durability, ensuring your bitcoin inheritance remains intact for years. 🚀
6/ Wrap Up: Choose an open-source hardware wallet, generate a secure seed, test your setup, create a strong passphrase, and secure your seed on metal solutions. Regularly check and update your setup. 🔄
7/ Educating Heirs: Communicate with heirs about your bitcoin holdings, even if they're not familiar with it. Provide them with essential information to ensure a smooth inheritance process. 🗣️
8/ Instructions and Access: Draft a step-by-step "treasure hunt" guide for heirs to access funds with seed shares. Keep it in a safe place with other important documents, making it easy for heirs to follow. 📜
9/ Challenges and Risks: Self-custody has security concerns - you are the only person in charge of your wealth - nobody else can help you. Full responsibility. Also requiring heirs to understand bitcoin basics. It suits those aligned with cypherpunk values.⚠️
10/ Self-Custody with Third-Party Assistance: An alternative involves third-party assistance with a focus on avoiding a single point of failure. This is not full custodianship but involves legal and tax considerations. 🤝
11/ Legal Assistance: Set up a wallet, seed, and passphrase as in self-custody cypherpunk way. However, store seed shares differently. Legal representatives or bank safe deposit boxes can hold one share and others can be in your possession. 🏛️
12/ Legal Framework: Create a testament with legal representatives outlining the post-death process. Alternatively, create a valid will yourself, ensuring your spouse knows about it. 📜
13/ Tax Considerations: Consider legal and tax implications based on your heirs' plans for the inherited bitcoin. Consult an attorney to understand specific implications in your jurisdiction. 💼
14/ Benefits and Drawbacks: While involving third parties can simplify inheritance, it may lead to disputes. Legal procedures offer tax benefits but sacrifice privacy, exposing heirs to scrutiny. ⚖️
15/ Conclusion: Inheriting Bitcoin requires careful planning. Choose between self-custody cypherpunk way or third-party involvement based on your values and priorities. Regularly reassess your setup to adapt to changing circumstances. 🔄
16/ Reminder: Avoid full custody solutions, as they carry risks and a single point of failure. Bitcoin's essence lies in self-custody and personal responsibility. Educate yourself, stay off the grid, and consider non-KYC bitcoin. 🌐
17/ Note: Get non-KYC bitcoin for more freedom in inheritance decisions. Educate heirs and ensure your setup remains valid. Remember, this information is not legal advice; research on your own what works the best for you. 📚
18/ Read the full article here:
Navigating Bitcoin Inheritance
Introduction
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