E253 3 Steps When a Bitcoin Owner Dies

E253 3 Steps When a Bitcoin Owner Dies


What do you do if someone dies owning Bitcoin, but you have NO IDEA how Bitcoin works? How do you recover the Bitcoin, so it doesn’t get lost forever? Right now, Bitcoin is delicately owned, meaning the tools of ownership are still being ironed out. It’s still very easy to have an accidental catastrophic loss.

Here are the basic steps to find the keys to the decedent’s Bitcoin.

Note that the steps below assume that the decedent’s Bitcoin is not on exchange, since the claim process for an exchange is very similar to traditional bank or brokerage. As exchange is a platform like CoinBase or Gemeni, where you have an account with that entity. Most hard-core bitcoiners have a personal custodied hardware wallet instead. Here, we are talking about those bitcoiners.

1. Look for hardware wallets

Look for hardware wallets

Looking for a wallet is the first and easiest step, because it’s something physical to look for. A hardware wallet may look like a USB drive, a type of smartphone, or a pocket calculator. Not sure what you’re looking at? Open Google images and search for “hardware wallet.”

If you find a hardware wallet, you probably need a PIN code to unlock the device. If you can’t figure out the PIN, at least you know the decedent owned a hardware wallet. If you can’t figure out the PIN, make sure to try step 3 below (word lists).

If you have the PIN, congrats. You’re able to unlock the device to access the decedent’s Bitcoin keys stored inside. (Note – the Bitcoin is not actually on the device. The device is a key to the Bitcoin). You can now use the hardware wallet to access, sell, or transfer the decedent’s Bitcoin. So, be sure to treat the PIN and device very securely.

2. Check phone and computer for software wallets

Check phone and computer for software wallets

You might want to scroll through the decedent’s phone to see what apps the decedent had. Google “top software wallet iPhone” or “best software wallet android” or “mac software wallet” to get an idea which apps to look for.

Again, the software wallet may be password protected. If you can’t guess or find the password, at least you know the decedent has a software wallet. You can use step 3 for word lists (below).

If you have the PIN, congrats. You’re able to unlock the device to access the decedent’s bitcoin keys stored inside. You can now use the hardware wallet to access, sell, or transfer the decedent’s Bitcoin.

Keep this device in a safe place! Anyone who has control over the decedent’s phone has the power to access, sell, or transfer the decedent’s Bitcoin. So, be sure to treat the PIN and device very securely. Also, be sure that you remember the PIN, because the device can lock you out for a period of time after too many failed attempts.

3. Look for 12- or 24-word lists

Look for 12 or 24 word lists

If you found a hardware or software wallet, but you can’t figure out the PIN or password, it’s still possible to access the decedent’s Bitcoin.

The hardware wallet or apps are really just wrappers, ways to conveniently hold the Bitcoin keys, but are not the keys in and of themselves.

Another format for decedent’s Bitcoin keys is a list of 12 or 24 secret words in a specific order (aka “seed phrase”). If you (or anyone else) has these words, you can use them to create a new hardware or software wallet, and therefore have full control to access, sell, or transfer the decedent’s Bitcoin.

You’ll be looking for a card, note, or letter with the seed phrase on it. So, if you find the 12 or 24 words, do NOT:

    1. Share them with anyone;
    2. Copy/paste them onto your phone or computer; or even
    3. Take a picture of them.

Just keep the paper secure until you can safely transfer the Bitcoin to a new account.

It’s also important to mention that even though you trust your lawyer, you shouldn’t share the passwords with him or her. Just let the lawyer know that you are in possession of what you believe is the hardware/software wallet and password.

Hopefully this gives you some insight for what to do and look for when dealing with a decedent’s Bitcoin. These questions and issues will become more common as more people start owning Bitcoin, but for now, most people are not sure how it works.

If you want to learn more about how a professional executor can help , check out my book, “How to Hire an Executor,” available on Amazon. I don’t have a Bitcoin chapter yet, but you’ll get a sense of how choosing a professional can make things easier, especially for something complicated like an estate that includes Bitcoin.

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