E214 Transferring Bitcoin Upon Death

<p>Let’s review a real-world case study of a client’s plan to transfer his bitcoin upon his death. This looks like an elegant solution, so let us know if you see any major red flags!</p> <h2>Cloned wallets and sharded seeds</h2> <p>The client’s plan focused on clone wallets and <a href= "https://anthonyspark.com/estate-planning-for-bitcoin/">sharded seeds</a>.</p> <p>The plan starts with two clone hardware wallets. A <a href= "https://en.bitcoin.it/wiki/Hardware_wallet" target="_blank" rel= "noopener">hardware wallet</a> is like a minicomputer that plugs into your USB drive, but it is not fully connected to the internet or the computer. It keeps your private keys/secret codes offline while allowing you to interact in online transactions. When you clone your hardware wallet, you make duplicates of it. Each clone wallet is password protected.</p> <p><img class="aligncenter size-medium wp-image-9864" src= "https://anthonyspark.com/wp-content/uploads/2021/04/Cloned-wallets-and-sharded-seeds-300x185.jpg" alt="Cloned wallets and sharded seeds" width="300" height= "185" /></p> <p>The client gives one clone wallet to his executor. He gives the other clone wallet to his sister (who is an heir). Neither the executor nor the sister has the PIN to the wallet. They just have the device. They will receive the PIN upon the client’s death either by dead man’s switch or from another heir.</p> <p>Then the client shards his seed phrase. Remember the seed phrase is 12 or 24 secret words that you can use to recover your cryptocurrency if something happens to your hardware wallet.</p> <p>The client has divided his 12 words into two chunks of 6. The client gives half of those seed words to his executor. The executor won’t receive the second half of the words until the client dies.</p> <p>Upon death, the executor will receive the PIN code to his clone wallet and then he has access to the cryptocurrency. The back-up plan is that the sister receives her PIN code from another heir or dead man’s switch. Then she has access to the cryptocurr