E335 Why a Letter of Instruction for Bitcoin Inheritance Will Fail

<p>A letter of instruction will likely fail for your bitcoin inheritance plan and should have only a marginal role in your plan, if any.</p> <p>Search for “bitcoin inheritance” and you will probably find lots of people advising you to write a letter of instruction for your heirs. We talked about this and even provided a <a href= "https://anthonyspark.com/e218-bitcoin-letter-of-instruction-to-heirs/"> sample letter of instruction</a>. Now, having spent a bit more time delving into different approaches to bitcoin inheritance, we’re de-emphasizing a letter of instruction.</p> <p>Note: this applies to self-custodied bitcoin, not held through a third-party.</p> <h2>Educate your heirs</h2> <p><img class="aligncenter size-medium wp-image-44571" src= "https://anthonyspark.com/wp-content/uploads/2023/09/Educate-your-heirs-300x169.jpg" alt="Educate your heirs" width="300" height="169" /></p> <p>A letter of instruction is a subcategory the general approach: I'll just educate my heirs! Some folks set up a fairly complicated bitcoin inheritance plan, but assure themselves, “I’ll make sure to educate my (spouse, son, etc.) on self-custody.”</p> <p>Like any other educational endeavor, you must have an eager and willing student, or it just won’t stick. You can educate them on self-custody as hard as you want, but unless your heir is self-motivated to learn, it probably won’t work well. They may appear to understand in the short term to appease you, but that “knowledge” will leak out of their heads almost immediately. Think back to when you started your Bitcoin journey: if you weren’t that interested and someone started discussing self-custody and hardware wallets, your eyes probably glazed over.</p> <p>You could blame the lack of self-motivation to learn on the ever-evolving status of bitcoin, but this is not the case. We see it all the time with other legacy assets like art, collectibles, and especially small businesses. Take, for example, a father who spent his life building his profitable small family business to pass on to h