Anthony S. Park

Multisig or a passphrase ("poor man’s multisig") are two ways to transfer custody to your bitcoin executor upon your death. Let’s compare, so you can decide which best fits your bitcoin inheritance plan.

Why multisig for bitcoin inheritance?

The main feature is splitting access to your bitcoin, so that it’s not catastrophic if just one of your keys is revealed, leaked, or hacked. While you should always be careful of how you manage your security materials, using a multisig allows you to be a little less uptight with your security practices. By contrast, if all of your stash is in a singlesig wallet, then access to that one key could cost you all of your bitcoin. If one key is lost, you lose it all. If one key is hacked, it’s all stolen.

Also, this is not necessarily what’s best for estate administration (which can last years), but rather the immediate transfer of custody to your executor. So this is not about how your executor will hold your keys during his tenure as your executor. This analysis is specifically regarding the pros and cons of how smooth the transfer will be from you to your executor upon death.

Lastly, the general pros and cons of multisig vs. singlesig with a passphrase (multi vs. single vendor risk, costs of multiple hardware wallets, ease of setup, etc.) are beyond the scope of this analysis.  For the purpose of this discussion, we are just looking at the pros and cons of transfer to your executor upon your passing.

Leaving a passphrase for your bitcoin executor

First, we’ll look at using a passphrase as a poor man’s multisig for your non-bitcoin executor. Your seed phrase and your additional passphrase combine as an imperfect 2-of-2 multisig of sorts.

A passphrase would be easier for a non-bitcoin executor, in theory, because it feels more like just a second password. By contrast, multisig can be more intimidating: and feel like those movies with a nuclear submarine where the captain and the first mate must each put a key in and turn on the count of three...

If you or your executor lose your passphrase, there’s at least theoretical hope to recover it with enough computing power (depending on length and complexity of the passphrase). People are not too great about choosing phrases randomly, and often use short passphrases that are easier to remember. A lost 12- 24-word seed phrase could not be recovered for the foreseeable future.

You could also hide your passphrase in plain sight, so that it’s easier to transfer to your executor. For example, writing a letter to your executor, where every fifth word comprises your passphrase. My understanding is this is poor opsec with a 12- or 24-word seed phrase, because seed phrase words are a finite set, and hackers have algorithms to scan text for seed phrase words.

But be aware: passphrases are not really designed for this, and there’s not much support for its use as a poor man's multisig. A non-professional executor may have trouble finding information online about passphrases as a 2-of-2 multisig. Whereas there are companies that, for a consultation fee, will take the time to walk the executor through the multisig process.

How your bitcoin executor will handle your multisig

With a 2-of-3 multsig, there are three independent keys (seed phrases and/or hardware devices), and you need two of them to access the bitcoin and make a transaction.

Multisg has more leeway for error: even if you lose one key, you still have two and can recover. This provides a margin for error in terms of catastrophic loss. With a passphrase (or any 2-of-2) set up, there are only two "keys", so if you lose either one, you can’t access your bitcoin.

A second benefit of multisig is that each key is strong and offers full protection because each key is a 12- or 24-word seed phrase, created with the fully researched cryptography security. Whereas you create your own passphrase, and we're all pretty bad at being sufficiently random (admit it, we use our kid’s name, anniversary, favorite movie quote, etc. as passwords).

Lastly, multisig has lower “smudge risk” than a passphrase.  Since 12- or 24-seed phrase words comes from a finite set of possible vocabulary words, if just of the handwritten seed words and smudgy, there is still good a chance of figuring out the word. But since your passphrase can be any word, in any language, or even gibberish, guessing a smudged word would be complete guessing.

The focus here is how your executor will solve the puzzle after your death so your bitcoin isn’t lost. For further reading on what executors deal with in general, check out my book on Amazon, “How Probate Works.”

Request your free consultation

 

 

A frictionless first estate plan is a great first step for Solo Agers with no plan at all. It helps Solo Agers clarify their thinking and decisions, all while having a basic plan in place in the meantime.

Why Solo Agers need a frictionless first plan

We’ve heard from many folks who are stressed because they have no plan whatsoever. In general, Solo Agers don’t have the traditional heirs and family members available to fill the executor role, so it is important to have something in place.

The reason why many Solo Agers don’t have a plan is often because of analysis paralysis. While estate planning is a series of decisions, some people get stuck analyzing every detail. Of course, there is also the fear of making the wrong decisions and the consequences that come from that. The biggest fear is choosing the wrong fiduciaries.

Why a frictionless plan?

A frictionless plan is a version of your estate plan that is as low-cost and as low-headache as possible.

When your estate plan is low-cost, psychologically it is easier to make decisions, because you realize that it’s not a big deal to make changes if needed. People feel more at ease when spending a few hundred dollars versus a few thousand dollars to create a plan and make changes when needed. Low-cost solutions allow you to easily reverse or change your plan and not feel like it is set in stone.

With a low-cost solution, the fear of making changes won’t prevent you from having any plan at all.

Example of a frictionless solo ager estate plan

Our plan for a frictionless Solo Ager estates includes three steps:

First, make a do-it-yourself will using one of the software programs that we’ve reviewed. One that we are currently recommending is Free Will. For basic wills, it gets the job done. https://anthonyspark.com/e187-3-best-free-diy-will-software/

Second, name a professional executor. If you feel comfortable with us, name us for now. It doesn’t have to be your final decision; you can change the executor any time.  https://anthonyspark.com/professional-executor/

Third, have an attorney-supervised signing. This is the biggest (low) cost involved. The reason we recommend an attorney-supervised signing is because there are a lot of technicalities to having a legally binding will signing. If you mess up even one or two parts, all of your hard work becomes moot. In the New York area, you can hire an attorney and their staff to witness the signing of your self-prepared will for $200 or $300 (compared to the thousands of dollars to hire an attorney to draft your estate plan). The cost of an attorney-supervised signing could be even lower outside of the New York area.  https://anthonyspark.com/e273-diy-will-vs-lawyers-for-solo-agers/

We hope that by outlining these low-cost options, you will be confident in creating a bare-bones plan as a safety-net to get you started.

Free copy of "The Solo Ager Estate Plan"

To learn more about estate planning for Solo Agers, click the link below to get your free copy of my book, “The Solo Ager Estate Plan.”

Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”

Let’s discuss how, why, and how long it takes to get “fresh” Letters Testamentary in New York. Fresh letters simply means that they are newly dated. Most of the time, probate takes months or even years, and during that time, you may need to get fresh copies of the letters to use.

Do letters of testamentary expire?

One question we get is “do the letters of testamentary expire?” Technically, no, they don’t expire. It’s not as if your executorship has ended and you need to renew it. Rather, letters are a certificate proving you are still the executor. For example, if you walk into a bank with your letters that are over a year old and you want to close the account, the bank will very likely accept them. In the last year a lot could have happened – the court could have removed you as the executor, the letters could have been suspended, or there could have been other issues. They want letters that have been issued within the past 30 days (or in some cases 60 days) to prove that yes, you are still the executor, and all is good.

How to renew letters testamentary

In the past, getting newly updated letters was relatively easy. You could walk into the court with $6 and they would simply print the letters and you would walk out with them. You could even mail in a request and get them back within a reasonable timeframe. The exception would be if the court is missing items in the probate file, such as affidavits, inventories, etc. It is the court’s leverage to make you fix any issues before they give you fresh letters. This doesn’t mean the letters have been revoked; it’s just the court’s opportunity to get something they need in return for something you need.

Fresh letters delays in New York in 2023

Now, getting quick letters are not happening. The court no longer allows you to visit the counter or walk in with your money and request. You have to upload a request for fresh letters online. Sounds easy, right? Here’s the issue – the courts are at least three months behind processing online filings. So, for example, requests uploaded in December are finally being processed in March. This doesn’t account for anything you may need to fix, which will add even more back and forth time.

 

If you have something important you need letters for (a real estate closing, for example), then you will need to plan well in advance for this. One option is to order letters right as the property is listed, possibly even before. You do run the risk of actually getting the letters quickly and them being outdated before the closing. In which case, you would need to order them again. You could get around this by ordering them every month or every other month until the closing to be sure that you have them. It may seem wasteful, but unfortunately, not having the letters could delay the closing (which is much more expensive than a few extra copies of letters).

Probate isn’t a quick process as it is, which is why it’s best to set expectations early in the process. Check out my book, “How Probate Works,” and when you get to the chapter on delays, just add on more time. Unfortunately, that’s the way things are right now.

Request your free consultation

 

As we’ve spoken about before, Anthony can be your professional executor, even if you don’t live in New York. We have been seeing many inquires from out of state lately, and these are the top 5 looking for Anthony to be their professional executor. We are located in New York, so we are not including New York inquiries on this list. While this isn’t a scientific study, this is what we are seeing based on our daily calls.

Georgia

First on the list, much to our surprise, is Georgia. Maybe because it is retirement friendly, which we have learned that it is. There is low sales tax, no inheritance tax, low income tax, real estate is “more bang for your buck” compared to other states, and it’s warm and super friendly. Although it is retirement friendly, we aren’t seeing that there is a large network of professional executors there. It works out for Anthony, since he spends most summers in Atlanta and is very familiar with Georgia.

New Jersey

This is less of a surprise, as it’s right across the river. We’ve found that a lot of New Jersey folks seek out New York professionals, thinking they will get a “city caliber” professional. It doesn’t matter where your executor lives, the fee is set by New Jersey state law. So, whether it’s a professional executor or a non-professional such as your nephew, they will get paid exactly the same. So, you may as well get the most for your money. And for Anthony, he’s in New Jersey often, so this is fairly easy for him.

Texas

Third on our list is Texas, and we don’t really have an explanation for this one. Perhaps, like Georgia, maybe it’s a good place for retirement. Again, while searching online, we are not many professional executors. But why Anthony? The only thing Anthony can think of is that in real life, he tends to get along well with Texans. Maybe the viewers and listeners sense that and want to work with him? After all, a professional executor is someone you will work together with, at least annually, so you should definitely have a good rapport. This state also works for Anthony, because he does travel to Texas often.

California

Fourth, and possibly the most surprising is California. It’s far from New York and on paper, it doesn’t seem like a good fit. California even as a fairly robust local professional fiduciary industry. They even have a certification and a trade association for professional executors. But for whatever reason (maybe the requirement of upfront fees by CA executors), clients want Anthony all the way in New York. Believe us, he is happy to serve in California – he loves it there!

Florida

Last, but not least is Florida, and this makes the most sense. It’s a huge retirement state. However, for legal reasons, serving as a professional executor is problematic. Anthony can’t actually not serve as a professional executor in Florida, because he doesn’t live there. Only blood relatives may be out of state executors. But there are ways to deal with this. Anthony can be a nonresident Trustee for a Revocable Living Trust. Trusts are becoming very common in Florida to avoid probate. Clients who want to work with Anthony find this trustee workaround a great option. And again, he has no problem traveling to sunny, warm Florida, which he does often.

If you want to find out what is required of an executor, I suggest reading Anthony’s book, “How to Hire an Executor.”

Request your free consultation

 

As you may know, Bitcoin does not have layers like legacy and traditional accounts do, so an inheritance plan needs to be created. We will discuss the drawbacks of constantly seeking and getting stuck on a “perfect” Bitcoin inheritance plan, and a few solutions for approaching the creation of these layers.

Legacy assets have inheritance layers, bitcoin does not

Legacy assets (banks and financial institutions) already have several layers or contingencies that you may not even realize. On the testamentary side (deciding who gets what), there may be a will, a trust, beneficiaries on the account, or payable on death designations. If you don’t have any of those, there are still default inheritance state laws called intestacy laws. Basically, even if you do nothing, there is a safety net of who gets what, and there are backup layers. You could name backup heirs, successor executors, etc., but even if you don’t, the intestate laws will dictate inheritance. This is not the case for Bitcoin.

The other side of inheritance is custody, since so many Bitcoiners self-custody. When you have Bitcoin assets on an exchange, you have a few failsafe layers. This includes password recovery. While you are living, you could contact the institution to gain access. When you pass, your heirs have a third-party custodian that they can turn to for assistance with accessing and liquidating. With self-custody, you don’t have this naturally built in to turn to.

Worst case, with traditional and legacy accounts, there is the process of unclaimed funds. This is where the assets go to the state after a certain amount of time if they are not accessed. This is in place, so the money doesn’t simply disappear or get lost. Bitcoin does not have anything like this yet.

Again, Bitcoin self-custody has few to none of these fail safes as of right now.

“Perfect” bitcoin inheritance solutions

Anthony has spoken with many Bitcoiners, and he keeps coming across the same problem – people are getting stuck waiting for the “perfect” inheritance solution. The plans, ideas, and visions for are different for each Bitcoiner, based on their level of security and knowledge. But for everyone it is important that you do not wait. While you’re working on your perfect plan, put in a satisfactory solution for the time being. You need a safety net.

If you worked really hard on your perfect inheritance solution and you believe it will work, great. But what if it doesn’t? There are no layers or fail safes in plan with Bitcoin self-custody. So, it’s up to you to create all of these layers, backups, safety nets, etc., so the funds aren’t lost.

How to make bitcoin inheritance layers

Start with a layer that you’re HIGHLY confident will work, even if you don’t love it (for example, it relies on a third party, exposes your KYC, etc.). Once you have that in place then add layers that increase your comfort and increase complexity. But keep in mind, increased complexity may increase the risk of not working.

Here is one example:

First is the base layer and one way to do this is to create a poor man’s multisig. If you have a single sig hardware wallet, you can give the seed phrase to your heirs and successor heirs (your wife and children perhaps), store a handwritten copy of your seed phrase in safe deposit box, and give your passphrase to bitcoin-savvy friend or professional bitcoin executor (executor and successor) named in your will. Again, you may not love this for privacy reasons, but you are fairly confident this would work.

Now, with the base in place as your safety net, you can do whatever you want. You can teach your heirs in hopes they will understand self-custody enough to take custody on their own with a letter of instruction and treat it as a family bitcoin wallet.

Again, remember you are not creating your perfect plan, you are creating your own safety net until you have your perfect plan.

Check out my book, “How Probate Works,” to get an understanding of the probate process. Then add all the extra steps your executor and heirs will need to do to administer your bitcoin. As always, please reach out with your questions and feedback!

Request your free consultation

 

 

We get this question quite often – can you sell your inherited property? The answer to this depends on many factors. First, you need to figure out if you can sell an inherited property. Here are a few steps for you to take to answer this, before you can decide if you need a probate lawyer or professional executor.

Check the deed to confirm you inherit

First, check the deed to see if the decedent actually owned the property. Some people stay in a home long after another relative has passed or they are long-term renters. It’s actually easy these days to get a copy of deed online. One example is ACRIS here in New York. Most other states and counties are similar.

One note – it is a bit harder to obtain documents for co-ops (co-ops always worse during the probate process). You would need to call the management company for the information, which is sometimes like pulling teeth. They will need to check their internal records for the owner, and they may not provide you with the information.

Once you have the deed, you want to clarify the owner. Is it the decedent? Was it in a trust? Is it in some other relative’s name? Let’s say it’s your uncle who passed, but he actually moved into the house after your grandfather passed years before. It could likely still be in your grandfather’s name. That would add a few layers of complexity to ownership. Deeds can also have joint owners, and co-ops can have beneficiaries. If there is a joint owner or beneficiary, and it’s not you, then you don’t own it.

What happens to a mortgage when house is inherited?

The next step is to see if there is a mortgage. When someone passes, the mortgage has to be paid off. So, it’s important to find out if there is a mortgage and how much it is. It doesn’t mean the heir is immediately on the hook for the mortgage payments, but it does need to be settled before the house is sold. If the mortgage amount balance is really large or underwater, it will definitely affect how you approach the estate. If the estate is close to or completely insolvent it makes the estate very cash poor, which changes how the estate is administered.

Checking for a mortgage is similar to checking for a deed. Except for co-ops, mortgage information may be found online, on the statements that come in the mail, tax assessment offices, or on tax returns.

In addition to searching for mortgages, you also want to look for potential larger debts. If there are tax debts, public assistance or Medicaid debts, second mortgages, etc., these debts must be paid first before anyone can get paid out from the proceeds from the real estate sale.

Did you inherit tenants, too?

Lastly, to determine if you can or want to sell the property, you need to figure out if the property is occupied. Did you inherit tenants? Is it vacent? If it’s occupied, it will affect how you approach the estate. For example, if there is another heir living there and won’t leave, that is a whole set of additional problems. If it’s an actual tenant, it’s not as clear cut as one would expect either. More often than not, tenants after the owner pass create problems and lose their moral compass. Evicting or removing tenants is usually a nightmare. It may change your approach to selling the property.

Check out Anthony’s book, “How Probate Works,” which will break down what is involved with administering a decedent’s estate with property.

Request your free consultation

Since we do so many probates, we see what parts of your planning actually helped with probate (dos), and which ones didn’t really matter (don't bothers).

We are reviewing this info so that you don’t spend too much of your valuable time on planning that won’t help all that much. This is based on our annual executor check in calls, in which we hear from our clients who have well intended plans to gather information for us, should we need it. Which in most cases, we don’t. We are trying to save you stress and make the estate planning process a little bit easier.

Solo ager estate planning “dos”

Good and proper storage of original documents is important. It’s best to keep the original with your professional executor or other third party. Do not keep it yourself. This is for many reasons, such as access your home or apartment. Additionally, if a third party loses your will, probate could still move forward with a copy. However, if you lose it, it’s presumed that you intentionally destroyed it. Same goes for a safe deposit box – it’s hard to get access to this. It’s not impossible, but it’s very challenging.

Update your emergency contacts and be sure your executor is among those listed. An emergency contact list should be given to someone who will know of your death. This could be a building manager, doorman, neighbor, primary care physician, etc. You want to make sure they know who to notify in the event of your passing, including of importance, your executor and next of kin.

You should also review your beneficiary designations. We have talked before about why we don’t like beneficiary designations, but if you have them, make sure up to date. Or better yet, get rid of them. You certainly want to make sure they represent your wishes, and not your wishes 10 or 20 years ago.

“Don’t bothers” for your solo ager estate plan

Don’t use treasure maps. We have received detailed letters and emails with where the will is, where their important documents are, and even where their spare keys are. More often than not, the location of these items will change by the time of your passing. It may take us longer to use the treasure map to find them than it would to simply look on our own. Plus, it would be a waste of time searching if they have been moved. It’s not worth the amount of time you’d spend writing this type of “map.”

We don’t need contact lists. Typically, the lists we’ve seen include building managers, financial advisors, etc. These change often. We find when we make these calls, the people on the list no longer even work there.

Speaking of lists, detailed lists of assets which include balances and very specific info is also not needed. High level information is good enough (such as the name of financial institution). Balances change daily, so by the time you write it down, it’s likely changed.

Sort of helpful

There are a few things we would categorize as sort of helpful, but you don’t need to spend time on these, if you don’t want.

Password lists are one example of a sort of helpful thing to do. A list is nice to have, but post-death access to online accounts is not permitted, even if we have your password and log in. We simply can’t use those passwords. Email and social accounts may have some use to be able to access names and addresses, although again, we have rarely used these. Same with phone passwords. We seldom log into a decedent’s phone, and if we do, it’s only to find a contact name that we couldn’t find elsewhere.

A high level asset list is sort of helpful. It will give us a general sense of what you own to point us in the right direction. We would use this list along with the other items we collect (mail, past tax returns, bank statements, etc.) to be sure we aren’t missing something.

A list of contacts that are likely to not change is also sort of helpful. This includes next of kin, your primary care doctor, and possibly your CPA. It’s good info to know, but likely, we would get the newest information from the documents we have gathered.

Solo Ager Book

If you don’t already have my book, “The Solo Ager Estate Plan,” click the link below for a copy.

Free copy of "The Solo Ager Estate Plan"

Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”

As you can imagine, probating a hoarder’s estate adds a few more complications. In this episode, we will talk about how to deal with some of the main challenges.

A hoarder can be defined as someone that likes to keep a lot of things; those that hold on to items with little value. As an executor, we define it as a situation where it’s abnormally difficult to navigate the living quarters. For example, a hallway that isn’t a hallway. Or trouble opening a door, because there are items blocking it.

How much does it cost to clean a hoarder’s estate?

On average, to clean out a hoarder’s house, it will cost about two to three times as much as it would cost to clean out a similar living space of the same size. We’ve chatted about the costs for cleaning a “normal” home, which can add up in a typical situation. For example, if you’re cleaning out a hoarder’s one-bedroom apartment, the cost will be the equivalent of a two-to-three-bedroom home. The reality is that you will need more movers, trucks, and dumpsters.

Another level of additional cost is dependent upon the cleanliness, which you may not know until the stuff is removed. You may be facing possible additional safety/hazmat costs, depending on the severity.

How to find important items in a hoarder probate

Another twist when you are dealing with a hording situation in probate, is how to find important items in the home. Even in normal (or conventional, typical) estates, it can be hard to track down important items. For example, executors need to look and find estate planning documents, tax returns, or tangible gifts such as art, jewelry, collectibles. There’s a much higher risk of not finding these items when the home is in this condition.

In addition, it makes the cleanout process much slower. Typically, we can find the items before it’s cleaned out. But, in a hoarding situation, we have to wait for the movers to clean out walkways to access areas to search. They are helping us gain more elbow room and to be able to navigate the living area. It’s a move items, search for items, move more items, search for more items game. You have to search as they are cleaning, which prolongs the process and adds time and money.

How to protect a hoarder’s reputation during probate

Another layer is how to protect the reputation of a hoarder during probate. Most hoarders aren’t proud of their situation, how much stuff they had, how they lived, etc. In this case, more than a few hoarders have explicitly asked us (as their professional executor) to hide the situation from family, friends, and neighbors. We’ve talked previously on how to handle privacy for our clients. We are happy to do this for them.

We will select our cleanout crew carefully, making sure they have a high level of professionalism and discretion. We’ve seen crews that have someone at the door nudging along nosey neighbors and some that even set up barriers to block the view in the home. In a building setting, even requesting the assistance of the building managers is important, as they are the first line of gossip defense.

If you want to find out what is required of an executor, I suggest reading my book, “How to Hire an Executor.” A non-professional executor may get overwhelmed by this particular situation. In addition, hiring a professional who will adhere to your request for reputation protection in a hording situation is important.

Request your free consultation

 

Could you imagine doing a ton of work and not getting paid? It’s frustrating, but it happens. One of the drawbacks of nonprofessional executors is they are more likely to lose their executor fee, despite doing months, even years, of work for the estate.

In this podcast, we are going to discuss a few real-world instances where this happened. We want to help you see that this can happen and that you don’t want to take on the executor role expecting a nice piece of change for your hard work. It sounds like a decent payday, but as we’ve discussed before, the ratio of hours worked to amount paid is not equal, and you may not even get a penny.

Family changed their minds, denied his executor fee

In this case, “Joey’s” aunt passed away and the aunt was survived by siblings. Joey was not even an heir and didn’t even live in New York, but he was younger and financially savvy. He was in a position to defer his job offer to focus on being an executor. Of course, his family “graciously” agreed to have him serve as executor.

So, Joey moved from California to New York and deferred a legitimate job offer. He put in three years of hard work administering the complex estate. In the end, his uncles objected to Joey getting paid. Literally at the very end, right as disbursement checks were being written out. Yes, he did have the right to fight for this executor commission, but it would put the family at odds with each other. So, for the sake of preserving family harmony, Joey didn’t fight. He walked away.

For those that think this would never happen to them or to their families, we hate to be the bearer of bad news, but it happens often, unfortunately. Family drama can happen when you’re dealing with emotions and money.

Contested will, contested executor commission

In this second situation, “Linda” was named as executor in her aunt’s will. Some family members contested the will, and after a lengthy and expensive litigation, the family settled on a revised breakdown of their inheritance. Side note – this was a good case where the decedent should have made a better plan to omit them.

During all this time, Linda, as the executor, was doing all the grunt work for over a year to vacate, repair, and sell her aunt’s dilapidated house. She also had to deal with the very stressful process of evicting bad tenants.

She did a great job.

Again, at the very end, right as checks were about to be sent out in accordance with the negotiated settlement agreement, the contesting family objected to Linda getting an executor commission. So, the family litigated that too, and Linda unhappily eventually settled on a reduced commission because the legal fees would’ve kept adding up to keep fighting. We watched her work so hard to eventually get less than deserved. Could you imagine working your normal full-time job to then get notice of a large reduction at the end of the year?

Court denied her executor compensation

“Kristy’s” good friend named her executor because Kristy happened to be a lawyer (though not a probate lawyer). Her friend made a DIY will.

Only when her friend passed and Kristy began probate did she learn that since she’s a lawyer (even though she wasn’t a probate lawyer and wasn’t acting as a lawyer for her good friend), the will needed certain additional paperwork and affidavits. In the absence of this paperwork and affidavits, the Court cut Kristy’s executor compensation in half!

Kristy spent multiple stressful years dealing with her friend’s estranged yet demanding heirs, banking issues, and other complications. In Kristy’s own words, she said that being an executor was “not worth it,” and she was a little embittered to her friend for putting her in such stressful role.

These are a few reasons that we talk about professional executors. If using a professional executor, family dynamics wouldn’t be a factor and there would be less of a debate by the family regarding the executor receiving their fee.

Executor

To learn more about hiring a professional executor, so this doesn’t happen to a friend or family member, check out my book, “How to Hire an Executor,” available on Amazon!

Request your free consultation

 

Here’s a mental exercise to put yourself in the shoes of your bitcoin heirs. The underlying assumption is that your heirs know nothing or know way less than you do about bitcoin. Many bitcoiners have a pretty deep knowledge of bitcoin, self-custody, operational security, and so on. And you may be so deep down the rabbit hole that you forget how daunting and confusing bitcoin can be.

Maybe by the time you pass away, bitcoin knowledge will become more common. But for now, most people don’t know what they’re doing. All of the above topics may as well be a foreign language to your non-bitcoiner heirs. And that’s a useful way to imagine how your heirs will feel. Think as if your bitcoin heirs will probate your estate in a completely foreign country (or planet).

Bitcoin is a different world

Imagine you had to probate an estate in a completely foreign country. Even with translation apps, you really don’t understand the basic language, especially slang and technical jargon. Even the most basic concepts are completely different.  For example, opening or closing an “account” doesn’t make sense in that foreign jurisdiction.

This is the type of confusion that your non-bitcoiner heirs may face, even if they have dabbled in bitcoin before. On top of all that, your heirs are dealing with the grief of your passing and other family dynamics.

Now imagine your heirs attempting bitcoin inheritance schemes

Now imagine your heirs attempting to follow a letter of instruction, a treasure map to constitute seed phrase shards, or operating a multisig wallet. If they do something wrong, everything could be lost.

Many of us still have a hard time empathizing, and think “I’ll write such a clear letter of instruction, no problem.” I’m sure your heirs wouldn’t want to be thrown into another planet with just one piece of paper telling them what to do. Remember, you have spent years researching and learning about bitcoin. An instruction letter is going to seem absurd and overwhelming to someone who knows next to nothing about bitcoin, let alone the probate process.

Pretend your uncle tells you he has assets in a foreign country: you don’t speak the language, you don’t know the customs or systems, and at every turn a corrupt bureaucrat or scammer could irrevocably steal everything. But don’t worry, he’s writing a really clear letter explaining everything!

How would you help your heirs with a foreign probate?

Whatever you think they’d need for a foreign probate is how you should help your heirs with their bitcoin inheritance.

You could try connecting them with a friend who is (reasonably) trustworthy and familiar with the foreign situation. You could go a step further by finding and vetting a local lawyer or other professional who your heirs can hire to help.

I know this rubs a lot of bitcoiners the wrong way because these ideas involve relying on a trusted third-party. From the point of view of someone who hates “trusted third-parties,” these suggestions may be a necessary evil to make sure your heirs actually inherit your bitcoin. A trusted third-party can be a back-up plan, but you can’t rely solely on a letter of instruction to a clueless bitcoin heir. That’s just asking for a post-death disaster.

If your heirs can’t administer your bitcoin correctly and it gets lost, everything you worked so hard for is gone.

As you know, I’ve been touring bitcoin communities to get a sense of how it all works. One thing I’ve observed from bitcoiners is their inability to remember how hard it was for them in the beginning. They know so much now, but it’s easy to forget that their heirs are starting from scratch.

Another thing is that people still mess up when dealing with “normal” bank accounts and brokerages during probate. Probate is not an easy process, and adding bitcoin to the mix just makes it that much harder for your executor and heirs.

Probate (can apply to Bitcoin)

Check out my book, “How Probate Works,” to get an understanding of the probate process. Then add all the extra steps your executor and heirs will need to do to administer your bitcoin.

As always, reach out with your questions and feedback!

Request your free consultation