What Happens to Your Bitcoin When You Die

Chainalysis estimated that between 2.3 and 3.7 million Bitcoin were lost, measured on data up to April 2018 (Chainalysis money supply analysis, archived). Chainalysis put the effect at 13 to 22 percent of market capitalisation. The lower bound counts wallets whose coins date from before 2014 and that have not spent anything since the start of 2014. The upper bound extends that cut-off to April 2016. The method guesses from inactivity, so some of those coins may belong to patient holders. A large slice of the supply is gone either way.

Nobody knows how much of that pile belonged to people who died. Anyone who quotes you a precise figure invented it. The mechanism is easy to picture, though. A holder dies without leaving instructions. The family inherits the house, the car, the bank accounts. The hardware wallet sits in a drawer next to old phone chargers. Nobody recognises it. You cannot recover those coins. You cannot inherit them. They are gone.

Every Bitcoin holder I know worries about inheritance. Almost none of them have written anything down. This chapter is here to change that for you.

Legal Rights Don't Unlock Wallets

A bank account has a custodian. So does a brokerage account, a pension fund, a life insurance policy. When you die, your heirs hand the institution a death certificate and a certificate of inheritance, and the institution cooperates because it must.

Bitcoin in self-custody works differently. The Bitcoin network has no customer service number. It has no forgot-password form. No probate court can compel a blockchain to release funds. The network does not know who you are. It does not know you are dead. It responds only to the correct cryptographic key.

If your heirs lack the seed phrase, the 12 or 24 words defined in BIP-39 that reconstruct your private keys in any compatible wallet, they cannot access your Bitcoin. Your will does not matter. A Swiss court order does not matter. The coins sit there, visible on the blockchain, mathematically locked, forever.

That gap sets Bitcoin apart from every other estate asset. The legal right to inherit something and the technical ability to access it are two separate problems. Your children may hold an enforceable claim to your Bitcoin under Swiss law and still never touch a satoshi of it.

What Swiss Law Says

Swiss inheritance law sits in Articles 457 to 640 of the Swiss Civil Code. Under Article 560, your heirs acquire the estate, the Nachlass, as a whole at the moment of your death, by operation of law. Bitcoin counts. It is a Vermögenswert, an asset with value, and it passes with the rest of the estate whether or not your will mentions it.

The forced heirship rules, the Pflichtteil, protect your children from full disinheritance. Since the reform in force on 1 January 2023, Article 471 sets their protected share at half of their intestate share. If Bitcoin makes up real value in your estate, your children hold a legal claim to a proportional cut. A will that hands everything to a partner or a foundation does not survive intact: a child who receives less than the Pflichtteil can sue to have the gifts reduced until the share is restored (Article 522).

Then the law collides with self-custody. A Swiss court can rule that your children are entitled to a specific share of your Bitcoin. The authority can order an estate administration (Article 554), and your will can name an executor, the Willensvollstrecker (Article 517). None of it matters without the seed phrase. Swiss inheritance law is mature and well-tested, but nobody wrote it for cryptographically locked assets. The law assumes property can be physically handed over or pried out of a custodian. A self-custodied wallet has no custodian, and a court order cannot move coins.

Bitcoin held for you by a Swiss bank or broker is different. The provider is the custodian. Your heirs hand over a death certificate, the Sterbeurkunde, and a certificate of inheritance, the Erbenbescheinigung, issued by the competent cantonal authority (Article 559), and the provider runs its estate process. It takes paperwork and patience, but it works the same way it does for a bank account.

Self-custodied Bitcoin, whether on a hardware wallet or a paper backup or anything in between, has no such mechanism. The provider is not involved. The notary is not involved. The blockchain is indifferent.

The Four Ways Bitcoin Inheritance Fails

Read the failure modes first. They tell you exactly what to defend against.

Mode 1: Heirs don't know Bitcoin exists. The holder never mentioned it. No bank statement points to it. The family liquidates the obvious assets, sees a strange USB stick in the desk drawer, and throws it out with the chargers. The Bitcoin vanishes and nobody understands what was lost.

Mode 2: Heirs know Bitcoin exists but can't access it. The family knows there were coins. Maybe the deceased mentioned them at a dinner. Maybe an old exchange email survives in the inbox. But no seed phrase turned up. The hardware wallet asks for a PIN nobody knows. A Ledger resets itself after three wrong PINs (Ledger Academy). A Trezor Safe 7 erases the wallet after 10, and other Trezor models after 16 (Trezor). Knowing Bitcoin exists is one problem. Reaching it is another.

Mode 3: Hardware wallet found, seed phrase found, passphrase undocumented. The cruellest scenario. Your heir follows the trail. They find the hardware wallet. They find the 24-word seed. They run the recovery and watch the wallet open with a zero balance. They assume the coins were already spent and give up. What happened: you set a BIP-39 passphrase, sometimes called the 25th word, which derives a separate wallet from the same seed. The seed alone opens a decoy. Your real funds sit behind the passphrase you never wrote down. The Bitcoin is still there, fully intact, untouchable.

Mode 4: Exchange account found, 2FA on a dead phone. Your heir digs up the username and password. The account asks for the six-digit code from an authenticator app on the deceased's phone, now locked or wiped, or from an SMS to a number the carrier already recycled. Without the 2FA backup codes, your heir depends on the exchange's manual recovery process and a stack of legal documents. Most people never save those backup codes anywhere their family will find them.

Every one of these failures is preventable. All four ask for the same thing: a person, before they died, wrote something down and stored it somewhere their family could reach.

Five Solutions, From Simple to Sophisticated

The Inheritance Letter

Write a letter. Not a legal document. Not a technical manual. A plain letter that tells your heirs what they need to know.

The letter is a practical document, not a will. A handwritten will, the eigenhändige letztwillige Verfügung, is valid only if you write it entirely by hand, from beginning to end, including the year, month and day, and sign it (Article 505). The same article requires every canton to provide an office where you can deposit such a will, open or sealed. Keep the inheritance letter next to the will, with your notary or your Erbrechtsanwalt, so whoever opens one finds the other. The will says who inherits. The letter says how to reach the coins.

The letter should cover:

• A clear statement that you hold Bitcoin and where it lives, both exchanges and self-custody wallets
• The brand and model of any hardware wallet, and where the physical device sits
• The location of the seed phrase. Reference where it is stored, not the words themselves, if the letter shares a location with the seed
• Whether you set a BIP-39 passphrase, the 25th word, and where to find it. Heirs who miss this step lose the coins
• The hardware wallet PIN
• Exchange account names, the registration email, and the username
• Where the 2FA backup codes live, or which device holds the authenticator app
• A contact, with phone number, who is technically capable of guiding your heir through the recovery
• The date you wrote the letter, so your heirs know how fresh the instructions are

Skip the seed phrase itself if the letter sits anywhere unsecured. If the letter goes into a sealed envelope at your notary, you can include everything together. If the wrong person might find the letter early, keep the seed somewhere else and point to it.

The letter costs nothing. It takes an hour. For most Bitcoin holders it does more for their heirs than any other single step.

Shamir's Secret Sharing

If you want structural protection against both loss and theft, Shamir's Secret Sharing splits your seed into multiple shares. Hardware wallets ship it as SLIP-39.

A 3-of-5 setup splits the seed into five shares and any three reconstruct the original. You might place one in a bank safe deposit box, one with a family member, one with your lawyer, one in a fireproof home safe, one with a second trusted party. Any three of those five rebuild your wallet. No single person holds everything, which also cuts your theft risk while you are alive.

Trezor supports multi-share SLIP-39 backups on the Safe 7, Safe 5, Safe 3 and Model T, but not on the Model One (Trezor). The same Trezor page lists Sparrow, Electrum and other software wallets that support SLIP-39, so your heirs are not tied to one device forever. They do have to understand that they need to coordinate with the other share-holders before they can recover anything. For a holder with significant size and several trusted parties, it beats a single seed document on resilience.

Multi-Signature Inheritance

Multi-signature custody demands multiple independent keys to authorise any transaction. A 2-of-3 setup means three keys exist and any two together can spend. Done right, it removes the single point of failure in every single-seed setup.

A practical inheritance structure: you hold one key on your hardware wallet, your Swiss notary or trusted lawyer holds the second in a sealed envelope, and the third sits in cold storage your heirs can reach. While you are alive, you sign with your key and the cold storage key. The lawyer's key never moves. After you die, your heirs collect the cold storage key, pair it with the lawyer's, and have the two signatures they need to spend.

Two US companies build inheritance into managed multisig. Casa's pricing page lists Standard at USD 250 per year with a 3-key vault and Premium at USD 2,100 per year with a 5-key vault, and includes inheritance in both. Casa describes them as 2-of-3 and 3-of-5 vaults and says Standard inheritance is available worldwide (Casa). Prices change, so check the page before you subscribe. Unchained offers an Inheritance Protocol, a set of documents meant to let your executor recover the Bitcoin without technical expertise. Unchained lists no international availability (Unchained vs Casa), so a Swiss resident cannot use it today. If you use Casa from Switzerland, pair it with a Swiss notary or Erbrechtsanwalt so the legal documents line up with Swiss inheritance law.

Digital Inheritance Services

Vault12 is a non-custodial mobile app. You appoint one or more Guardians, people or devices, who together safeguard your protected seed phrases, and a legacy contact who can inherit if something happens to you. Vault12 states that it never stores your data on its servers and that it is not a financial institution, exchange or custodian. It is available on the Apple App Store and Google Play.

Sarcophagus is a decentralised dead man's switch on the BASE blockchain. You encrypt a file, perhaps a seed phrase or a set of access instructions, and set a resurrection timer. Check in before the timer runs out and it resets. Miss the check-in and the encrypted file releases to a designated recipient. If you die or become incapacitated, your heir eventually receives the file automatically. The protocol runs on smart contracts and has its own token, which brings its own risks: protocol bugs, token-economics uncertainty, and the requirement that your heir knows to look for the message and how to decrypt it.

Both services are newer than the legal instruments. Treat them as an additional layer in a broader plan, not a standalone solution.

Custody at a Provider for Smaller Amounts

Bitcoin held at a Swiss bank or broker is the simplest inheritance scenario. Your heirs walk through the standard estate process: death certificate, Erbenbescheinigung from the cantonal authority, contact the provider's estate team. The provider cooperates. It takes time. It works.

The trade-off is counterparty risk while you are alive. You do not hold the keys. The provider could be hacked, become insolvent, or freeze withdrawals for regulatory reasons. I am not arguing custody at a provider is wrong. It is a deliberate choice, with risks self-custody avoids.

For smaller holdings, or as a deliberate slice of your inheritance plan, custody at a provider is reasonable. For everything you intend to hold long-term in self-custody, the other solutions above apply.

How Much You Hold Shapes What You Do

The right approach tracks what you are protecting.

Under CHF 10,000: an inheritance letter combined with custody at a provider for at least part of the position is proportionate. Write the letter, deposit it with your notary or store it sealed alongside your will, and document your accounts clearly.

Between CHF 10,000 and CHF 100,000: the inheritance letter is your floor. Layer Shamir's Secret Sharing on a Trezor or a basic multisig setup on top, and you cut your exposure to both loss and theft.

Above CHF 100,000: a managed multisig service such as Casa, with legal documents drawn up by a Swiss estate lawyer, earns its keep. At this size, the annual fee is small against the value you are protecting, and legal clarity around inheritance matters more.

These thresholds are my own rule of thumb, not financial advice. Your family structure, the technical skills of your heirs, the number of wallets and accounts you run will all shift the answer.

What to Do This Week

Write the letter.

Not next month. Not when you have time to research the perfect solution. This week, take an hour and write a clear document that tells your heirs what they need to know. Where is the Bitcoin? Where is the hardware wallet? Where is the seed phrase? Did you set a passphrase? What exchange accounts exist? Where are the 2FA backup codes?

A rough draft in a sealed envelope in your safe today beats a perfect plan you never wrote. The detailed solutions, Shamir shares, multisig custody, digital services, can follow. The letter goes first.

Date the letter. Review it once a year, or whenever something changes: a new wallet, a new exchange account, a hardware swap. You are not aiming for a perfect document. You are aiming for a document that exists.

If you have a notary in Switzerland who already handles your estate documents, ask about depositing a sealed envelope with the will or beside it. Your heirs will never call a blockchain for your Bitcoin. They will look to what you left behind.

This chapter is general information, not legal advice. Swiss inheritance law turns on your specific circumstances, and anyone with significant Bitcoin holdings should consult an Erbrechtsanwalt familiar with digital assets.

Chapter Summary

• Chainalysis estimated 2.3 to 3.7 million Bitcoin lost, on data up to April 2018, and some of it belonged to holders who died without leaving access instructions. None of it comes back.

• Swiss law passes Bitcoin to your heirs with the rest of the estate (ZGB Art. 560). The Pflichtteil protects your children. Legal entitlement is worthless without the seed phrase, because no court order unlocks a self-custodied wallet.

• The four failure modes are preventable: heirs not knowing Bitcoin exists, knowing but lacking access, finding a seed that opens only a decoy because an undocumented passphrase guards the real wallet, and getting locked out of an exchange by 2FA on a dead phone.

• The inheritance letter, kept with your notary, lawyer, or in a fireproof safe alongside your will, is the highest-leverage move most Bitcoin holders can make. Write it this week.

• Shamir's Secret Sharing (SLIP-39), managed multisig such as Casa, and digital services like Vault12 add resilience for larger holdings. The right stack depends on size and family structure.