Bitcoin Inheritance Gaps

Identifying Gaps in Inheritance Preparation

This memo is published by CustodyStress, an independent Bitcoin custody stress test that produces reference documents for individuals, families, and professionals.

Discovery Gaps

Inheritance planning often focuses on what to include—what documentation to create, what information to leave, what arrangements to establish. Less attention goes to examining what is typically missing. Bitcoin inheritance gaps represent the absent elements that prevent successful succession, the holes in plans that may otherwise seem complete. Focusing on gaps reveals where plans fail rather than where they succeed.

Gaps differ from incompleteness. A plan may contain substantial elements and still have critical gaps. The presence of good components does not indicate absence of missing ones. Identifying gaps requires looking for what is not there rather than evaluating what is.

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Discovery Gaps

Before heirs can access bitcoin, they must know it exists. Many inheritance plans assume heirs will find the necessary information. This assumption often fails. Discovery gaps occur when heirs do not know what to look for, where to look, or that they should be looking at all.

Bitcoin holdings can be invisible to survivors. Unlike bank accounts that send statements or real estate that appears in records, self-custody bitcoin may leave no external trace. Heirs may complete estate settlement without ever realizing cryptocurrency was part of the estate. The bitcoin exists but remains undiscovered.

Pointers to information may be missing. Even when heirs know bitcoin exists, finding where custody information is stored presents another challenge. A seed phrase in a safe deposit box goes unfound if no one knows the safe deposit box exists. Instructions stored in an unknown location remain unread.

Multiple layers of discovery may be required. First, heirs must know bitcoin exists. Then they must find custody materials. Then they must locate documentation explaining what to do with those materials. Each layer presents opportunities for gaps. Failure at any layer can prevent success at subsequent layers.

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Understanding Gaps

Having information differs from understanding it. Heirs may possess all necessary materials yet fail because they do not comprehend what those materials mean or how to use them. Understanding gaps occur when knowledge transfer falls short of enabling action.

Technical vocabulary creates barriers. Instructions that say "restore the wallet using the seed phrase" assume the heir knows what a wallet is, what a seed phrase is, and what restoring means in this context. Each unfamiliar term represents a potential stopping point. Accumulated unfamiliar terms compound into comprehension failure.

Implicit knowledge does not transfer. Holders know things they never explicitly articulated—which device to use, what software works, what the interface looks like. This tacit knowledge guided the holder's actions but does not appear in documentation. Heirs must act without the implicit context the holder possessed.

Concepts require foundation. Explaining multisig to someone who does not understand single-signature fails because the foundation is missing. Instructions that skip foundational concepts assume preparation the heir may not have. Each assumption represents a potential understanding gap.

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Access Gaps

Understanding what to do differs from being able to do it. Access gaps occur when heirs know what is needed but cannot obtain it. Physical barriers, credential requirements, and dependency chains all create access failures.

Physical access may be blocked. Materials stored in locations the heir cannot reach—safe deposit boxes at banks that do not recognize their authority, safes with unknown combinations, properties in distant locations—remain inaccessible despite clear documentation about their existence.

Authentication requirements may defeat heirs. PINs, passwords, and passphrases known only to the holder lock access to devices or accounts. Recovery options that assume the holder is alive do not work when the holder is dead. Digital barriers remain as impermeable to legitimate heirs as to illegitimate ones.

Dependencies may chain together in ways that prevent progress. To access A, the heir needs B. To access B, they need C. If any link in the chain breaks, subsequent links remain unreachable regardless of the heir's understanding or authority. Dependency gaps cascade through plans.

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Coordination Gaps

Some custody arrangements require multiple parties to act together. Multisig setups need multiple signatures. Distributed key holders must coordinate. When the holder was alive, they orchestrated this coordination. After death, coordination gaps emerge when no one fills that orchestrating role.

Contact information may be outdated or missing. Key holders who should coordinate may not be reachable. Phone numbers change. Email addresses expire. Relationships drift. The heir charged with coordinating may not be able to reach the parties needed.

Role clarity may be absent. Who initiates coordination? Who is responsible for what? The holder knew implicitly; documentation may not state explicitly. Without clear role assignment, coordination stalls as parties wait for each other to act or assume someone else is handling things.

Incentive misalignment can prevent cooperation. Family members holding keys may have conflicts unrelated to bitcoin. Personal disputes, inheritance disagreements, or simple non-responsiveness can block coordination even when all parties technically have what they need. Social gaps compound technical requirements.

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Timing Gaps

Inheritance operates on timelines. Estate settlement has deadlines. Tax obligations create schedules. Beneficiary needs impose urgency. Timing gaps occur when inheritance requirements collide with these external pressures in ways the plan did not anticipate.

Learning curves take time that may not be available. Heirs who need to learn new concepts before executing recovery face a clock they cannot pause. What might be manageable with unlimited time becomes impossible when time constraints apply. The pace of estate administration may exceed the pace of learning.

Geographic distribution slows access. Materials stored in multiple locations require time to retrieve. Travel, shipping, and coordination all consume time. Distributed security that protects against localized theft creates timing drag that concentrated storage would avoid.

External dependencies operate on their own schedules. Banks have processing times. Legal proceedings have court dates. Professional advisors have availability constraints. The inheritance plan may not account for how these external timelines interact with internal requirements.

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Capability Gaps

Even with complete information, correct understanding, full access, proper coordination, and adequate time, heirs may simply lack the capability to execute recovery. Capability gaps exist when the plan demands skills or attributes the heirs do not possess.

Technical skills vary enormously. Tasks routine for technically comfortable people may be impossible for those who are not. The heir population includes people across the entire technical capability spectrum. Plans that assume mid-range capability exclude those below that range.

Emotional capacity under grief affects execution. Heirs recovering bitcoin while mourning operate with reduced cognitive function. Tasks that would be manageable in normal emotional states may exceed capacity during bereavement. Plans that assume normal capacity face reality of diminished capacity.

Physical capabilities may limit execution. Vision, dexterity, mobility, and stamina all affect what heirs can do. Elderly heirs, heirs with disabilities, or heirs in poor health face barriers that physically capable heirs would not. Capability assumptions embedded in plans may not match actual heir capabilities.

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Update Gaps

Inheritance plans created at one point may not remain valid at a later point. Update gaps occur when changes—in technology, relationships, circumstances, or the custody system itself—render plans obsolete while the holder treats them as current.

Technology evolves. Wallet software changes. Hardware devices become discontinued. File formats become obsolete. Documentation that accurately described recovery in 2020 may not accurately describe recovery in 2030. Plans require updating as technology shifts.

Relationships change. The trusted family member designated in the plan may become estranged, incapacitated, or deceased. Contact information becomes outdated. Key holders move, change their lives, or forget their roles. Human factors drift while documentation remains static.

The custody system itself may have changed. Holders who modify their setups may or may not update inheritance documentation accordingly. A gap between what documentation describes and what actually exists can completely defeat recovery. Version control on inheritance plans is rarely rigorous.

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Contingency Gaps

Plans typically describe primary paths. What if those primary paths fail? Contingency gaps occur when backup plans for failed primary plans do not exist. Single paths leave no alternatives when the intended path does not work.

Primary contacts may be unavailable. If the first person who should help cannot, who comes next? Plans that name specific individuals without alternatives leave heirs stranded when those individuals are unreachable, unwilling, or unable to assist.

Primary procedures may not work. What if the documented steps produce errors? What if software has changed? What if hardware fails during recovery? Plans that describe only expected scenarios leave heirs without guidance when unexpected scenarios occur.

Primary assumptions may prove false. What if the heir cannot reach the storage location? What if the bank will not release the safe deposit box contents? What if the documented password does not work? Each assumption represents a point where primary plans can fail and contingency plans are needed.

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Identification of Gaps

Finding gaps requires looking for what is not there rather than checking what is. This reversal of normal evaluation proves difficult. Presence is easier to verify than absence. Confirmation that elements exist does not confirm that all necessary elements exist.

Structured examination helps. Walking through the entire inheritance process from the heir's perspective—knowing nothing beyond what they would actually have access to—reveals assumptions that documentation makes but heirs cannot fulfill. Role-playing the heir's experience exposes gaps that author-perspective misses.

External perspective provides different visibility. Someone unfamiliar with the plan sees different things than its creator. Naive questions from a spouse or advisor reveal implicit assumptions. Explaining the plan to someone who does not know it tests whether the plan actually conveys what it needs to convey.

Periodic review catches drift. Gaps that did not exist initially can develop over time as circumstances change while documentation stays static. Regular re-examination with fresh perspective identifies gaps that accumulate between reviews.

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Outcome

Bitcoin inheritance gaps represent what is missing from succession plans—the absent elements that prevent heirs from successfully recovering bitcoin. Discovery gaps hide the existence or location of holdings and materials. Understanding gaps prevent comprehension of found materials. Access gaps block physical or digital entry. Coordination gaps leave multi-party requirements unmet.

Timing gaps collide inheritance requirements with external deadlines. Capability gaps demand skills heirs do not possess. Update gaps render obsolete documentation that was once accurate. Contingency gaps leave no alternatives when primary plans fail.

Identifying gaps requires looking for absence rather than presence, a reversal that proves difficult without structured examination, external perspective, and periodic review. Presence of good elements does not indicate absence of missing ones. Inheritance plans fail through their gaps, not through their completed components.

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System Context

Examining Bitcoin Custody Under Stress

How Will Family Know What to Do With Bitcoin as a Knowledge Transfer Gap

Bitcoin Custody Overlooked Risks

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