Inheritance Planning and Estate Security

What you'll learn

• The Most Avoided Conversation in Crypto
• Hal Finney: A Case Study in Doing It Right
• Casa, Unchained, and Other Professional Services
• Jurisdiction Issues and the Legal Landscape
• Concrete Recovery Scenarios
• A Practical Action Plan
• For Deeper Reading

Key terms

Estate planning

The process of arranging for the management and disposal of your assets after death or incapacity. Critical for cryptocurrency because of its bearer-property nature.

Bearer property

Property whose ownership transfers by physical possession of an instrument or knowledge of a key. Cryptocurrency, cash, and gold coins are bearer property. Stocks held by a broker are not.

Hal Finney

Cryptographer, second person to run Bitcoin software, recipient of the first BTC transaction. Diagnosed with ALS in 2009, died in 2014. Documented exemplary cryptocurrency inheritance planning during his illness.

Casa

A self-custody and multi-sig service founded in 2018. Offers integrated inheritance planning where Casa holds one key in a multi-sig setup, released to beneficiaries upon proof of death.

Unchained Capital

A Bitcoin-focused multi-sig and financial services firm founded in 2017. Offers vaults, lending, IRAs, and inheritance support, primarily for high-net-worth individuals.

Sarcophagus

A decentralized dead-mans-switch protocol on Ethereum founded in 2021. Encrypts a payload that is automatically decrypted and delivered to beneficiaries if the user fails to renew within a defined window.

Step-up in basis

A U.S. tax provision where inherited assets are valued at fair market value as of the date of death, not the original cost basis. Applies to cryptocurrency under IRS Notice 2014-21 (treating crypto as property).

Power of attorney

A legal document authorizing one person to act on behalf of another. For cryptocurrency, must specifically address digital assets and access mechanisms; generic POA language may not suffice.

Duress PIN

A hardware wallet feature that opens a different (decoy) wallet when a specific PIN is entered. Allows a user under coercion to comply visibly without exposing primary holdings. Supported by Coldcard and others.

BIP-39 25th word (passphrase)

An optional additional secret combined with the seed phrase to derive a different wallet. Without the passphrase, the seed phrase alone reveals nothing. Useful for plausible deniability and protection against physical theft of seed.

FATCA

Foreign Account Tax Compliance Act (2010). Requires foreign financial institutions to report U.S. account holders. Treatment of cryptocurrency under FATCA remains partially ambiguous as of 2026.

IRS Notice 2014-21

The U.S. IRS guidance establishing that cryptocurrency is treated as property for federal tax purposes, including inheritance. Foundational document for U.S. crypto tax and estate law.