Inheritance & emergency plan: so your bitcoin isn’t lost

Bitcoin in self-custody isn’t listed in any bank register, and no customer service will send your heirs a new password. If nobody knows about your bitcoin or nobody can reach the backup, they are lost. An emergency plan prevents that without weakening your security today. It isn’t an easy subject, but it’s very manageable – we’ll show you step by step what belongs in the plan.

Legally clear, practically difficult

On death, the entire estate passes to the heirs.^[1] According to Germany’s Federal Court of Justice (Bundesgerichtshof), the contract for an online account passes to them too, just as letters and diaries are inherited (a 2018 ruling on a social network account).^[2] With an exchangeTermExchange (crypto exchange)A trading platform where buyers and sellers trade bitcoin with each other via an order book.On the learning path: Stage 4 · Step 2 – Choosing a provider →In the glossary →AdLicensed providers with a paid linkProviders from our comparisonKrakenExchange · MiCA (Central Bank of Ireland)Visit Kraken* (paid link, opens in a new window)BitvavoExchange · MiCA (AFM, Netherlands)Visit Bitvavo* (paid link, opens in a new window)CoinbaseExchange · MiCA (CSSF, Luxembourg)Visit Coinbase* (paid link, opens in a new window)All 7 compared – including non-partners →*Paid link: if you sign up or buy through it, we earn a commission. Your price stays the same. How we make money →18+ · Crypto assets are highly volatile; you could lose all your money. No deposit protection.×, your heirs therefore generally step into your shoes and prove their status, for example with a certificate of inheritance (Erbschein).^[3]

With self-custodyGlossarySelf-custodyYou hold the private keys to your bitcoin yourself – in your own wallet rather than with a provider. Nobody can freeze your bitcoin. But nobody can help you if you lose your seed phrase and keys.On the learning path: Stage 5 · Step 1 – Understanding custody →In the glossary →×, on the other hand, there is nobody your heirs could claim anything from. If the private key and seed phraseGlossarySeed phrase (recovery phrase)A sequence of usually 12 or 24 words from which your wallet derives all its private keys. Anyone who knows the words has full access to your bitcoin – so they belong in an offline backup and never in anyone else’s hands.On the learning path: Stage 5 · Step 3 – Backing up your seed phrase →In the glossary →× are gone, nobody can get at the bitcoin any more^[4] – not even with a certificate of inheritance.

A good plan therefore solves two opposing problems:

• Too little information: nobody knows about the bitcoin or finds the backup. The funds are lost.
• Too much information in the wrong place: the backup is lying around or written in a document many people read. The funds can be stolen, even during your lifetime.

The emergency letter: what goes in – and what doesn’t

The letter to your relatives says that there are bitcoin, where the documents are and how to proceed – but not the secrets themselves. The Bitcoin Design Guide recommends the same: all the recovery steps, but without the seed phrase and passphrase, so that a letter someone finds isn’t enough to steal the funds.^[5] For digital estates in general, Germany’s consumer advice centre (Verbraucherzentrale) recommends an overview of online accounts including login details.^[6] That doesn’t apply to the seed phrase: anyone who reads it has full access immediately.

Belongs in the letter	Does not belong in the letter
That you own bitcoin, and roughly how much	Seed phrase, not even partially
Exchanges and apps with customer number	Passwords, PINs, 2FA codes
Which wallets exist: software, hardware model, single-sig or multisigGlossaryMultisig (multi-signature)A wallet in which several keys jointly control the bitcoin – for example 2 of 3. If one key is lost or stolen, the bitcoin stays safe. In return, setting it up and backing it up is considerably more demanding.In the glossary →×	The passphraseGlossaryPassphrase (the ‘25th word’)An extra word of your choice added to your seed phrase. The same words then produce a completely different wallet. This protects you if someone finds your words – but if you forget the passphrase, access is lost for good.On the learning path: Stage 5 · Step 3 – Backing up your seed phrase →In the glossary →×
Whether there is a passphrase; where the backups and passphrase are (location, not content)	Photos or copies of the backups
Address type and derivation pathGlossaryDerivation pathThe route a wallet follows to calculate individual keys from your seed phrase, for example m/84'/0'/0'. If another wallet uses a different path when you restore, it looks empty – even though nothing has been lost.In the glossary →×; for multisig, where the wallet configuration is kept	Addresses with exact balances
Who can help technically, where purchase receipts are, a warning about scammers

Write it so that someone with no knowledge of Bitcoin can follow it. Add a printed recovery guide, for example from Testing recovery.

Storage: separate knowledge and access

Today, no single place and no single person should have sole access – but if the worst happens, the right people should be able to put everything together.

Why the seed phrase doesn’t belong in your will

In Germany, after a death the probate court (Nachlassgericht) opens the will and notifies the parties involved in writing of the parts that concern them.^[7] A seed phrase would pass through several hands. So in your will, only say where the emergency letter is.

Who knows what?

Who or what	Knows	Doesn’t know
Emergency letter (e.g. in your personal affairs folder)	that bitcoin exist, where the parts are, who can help	seed phrase, passphrase
Place A (e.g. safe at home)	seed phrase (metal backup)	passphrase
Place B (e.g. trusted person, sealed)	passphrase	seed phrase
Technical trusted person	how to restore	seed phrase and passphrase

That way, neither a burglar nor a trusted person has sole access; if the worst happens, the letter leads to all the parts.

For digital estates, the Verbraucherzentrale also recommends a power of attorney for a trusted person that expressly remains valid after death.^[6] It can help with accounts at providers. Whether a provider accepts it and how to word it is best clarified with a notary or a specialist lawyer.

For the seed phrase at place A, a metal backupGlossaryMetal backupA backup of your seed phrase on steel or titanium – punched, engraved or made with letter tiles. Unlike paper, it survives fire and water. Independent tests show that simple stainless steel plates are robust and often the cheapest.On the learning path: Stage 5 · Step 3 – Backing up your seed phrase →In the glossary →× is a good choice. It stands up to fire and water far better than paper. More in Backing up your seed phrase.

Three models for succession

Model	How it works	Strengths	Weaknesses
Simple: backup + letter	Seed phrase well secured, the letter names the place	easy to implement, few sources of error	Anyone who finds the backup has full access
Split: seed phrase + passphrase	Both parts in separate places, the letter names both	a backup found on its own isn’t enough	If one part is lost, everything is lost
Several keys: multisig or timelock	e.g. 2 of 3 keys held by you, an heir and a trusted person; or an inheritance key that only becomes valid after a set period	robust against loss and theft	demanding to set up and to explain

For the third model there are specialised services. With NunchukProvider · Software walletNunchukMultisig wallet for smartphone and desktop – no subscription if you do it yourself, subscriptions for assisted multisig and inheritance.Non-custodial software – no financial licence required · reviewed Sept 2026Price: Basic version $0; subscriptions $120 to $2,100 a year (as of Sept 2026)On the learning path: Stage 5 · Step 2 – Setting up your first wallet →Our profile →Official website ↗×, for example, an inheritance plan with a timelockGlossaryTimelockA condition under which bitcoin may only be spent from a certain block height or point in time, or after a waiting period. Timelocks are a building block for Lightning and for inheritance and emergency setups.In the glossary →× stays dormant until a date you choose; according to the provider, it holds only one key and can’t move the funds on its own (as of September 2026).^[8] The basics: Multisig simply explained.

A sophisticated system that nobody can operate after your death is worse than a simple one that works. Walk through the process once with the person who will help later – without showing them the secrets.

Tax in brief (Germany)

Not tax advice; as of September 2026. In detail: Gifting & inheriting Bitcoin.

• Inheritance tax: personal allowances apply, for example €500,000 for spouses and €400,000 for children.^[9] Acquisitions from the same person within ten years are added together.^[10] What counts is generally the euro value on the date of death.^[11],[12]
• Notification: heirs must report the acquisition to the tax office (Finanzamt) within three months of learning of it. This is waived only in narrow cases, for example with a will opened by a German court or notary – and even then not if the estate includes, say, real estate, business assets or assets abroad.^[13]
• Holding period: heirs take over your purchase date; the one-year holding periodGlossaryHolding period (speculation period)In Germany, the gain from selling privately held bitcoin is tax-free if more than one year passes between purchase and sale (§ 23 EStG, as of September 2026). Each purchase has its own holding period.On the learning path: Stage 6 · Step 3 – Bitcoin & tax →In the glossary →× doesn’t start again.^[14] To prove this, they need your purchase receipts. Whether this changes is tracked in our reform tracker.

Once a year: review the plan

New wallet, a move, a trusted person who can no longer be reached – the plan goes out of date. Once a year, take half an hour, for example on your birthday: read the letter, check the places, update the date. While you’re at it, go through the big security checklist.