E210 How to Administer a Bitcoin Trust

<p>In <a href= "http://anthonyspark.com/e206-how-to-set-up-a-bitcoin-revocable-trust"> Episode 206</a> we talked about how to set up a trust. This time, we’ll talk about how to manage a bitcoin trust as the trustee.</p> <h2>How to Transfer Bitcoin to Trustee</h2> <p><img class="aligncenter size-medium wp-image-9685" src= "https://anthonyspark.com/wp-content/uploads/2021/03/How-to-transfer-bitcoin-to-trustee-225x300.jpg" alt="How to transfer bitcoin to trustee" width="225" height= "300" /></p> <p>As we discussed in <a href= "http://anthonyspark.com/e206-how-to-set-up-a-bitcoin-revocable-trust"> Episode 206</a>, there are a couple of ways to transfer control of the trust to the trustee. These are the dead man’s switch, sharding, and even old-school envelopes.</p> <p>The dead man’s switch requires the trust maker to hit a button at regular scheduled intervals. Failure to hit the button presumes your death, and an email containing your seed phrase gets sent to your trusted people. (This is not a good plan, since it stores your seed on a ‘hot” device, the email server).</p> <p>You can also “shard” your code and break up your seed phrase into chunks. You would give these chunks to different trusted people who will come together after your death to put the pieces together.</p> <h2>How to Invest the Trust Assets</h2> <p>Now that trustee has control, how should the trustee hold and manage the Bitcoin? This depends on the decedent's wishes.</p> <p>Sometimes, the decedent’s wish is to liquidate to fiat, convert to cash, then invest it as a normal trust.</p> <p>But most bitcoin holders probably want their trust to continue to hold bitcoin on behalf of the heirs. The problem is that there is no such thing as a fiduciary account on the centralized exchanges. That is, there's no way for a trustee to open an account at <a href="http://coinbase.com/join/park_jq1" target="_blank" rel= "noopener">Coinbase</a>, Gemini, etc. Those exchanges only allow individuals to open accounts, not trusts. So make sure you choose a trustee who kno