Executor Authority vs Bitcoin Signer

Executor Authority Versus Keyholder Capability

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

Two Roles with Different Origins

Someone dies owning bitcoin. Their will names an executor to administer the estate. Separately, the deceased may have shared bitcoin signing capability with someone else—perhaps a trusted friend, a technical advisor, or a family member who helped with custody setup. These two roles, executor authority vs bitcoin signer, may now reside in different people who have different relationships to the deceased, different interests in the outcome, and different understandings of what should happen next.

This assessment considers the mismatch that emerges when legal authority and technical capability diverge. Traditional estate administration assumes that whoever has authority can access assets through institutional channels. Self-custody bitcoin breaks this assumption by separating the ability to move bitcoin from the right to direct how it moves. When authority and capability land in different hands, each party holds part of what is needed and neither holds all of it.

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Two Roles with Different Origins

Executor authority comes from legal appointment. The deceased named someone in their will, or a court appointed someone through probate proceedings. This authority carries specific duties: marshaling assets, paying debts, filing taxes, distributing property according to the will or intestacy rules. Courts oversee this process and can hold executors accountable for how they perform their role. The authority is formal, documented, and embedded in a legal framework that has centuries of precedent.

Bitcoin signing capability comes from possession of cryptographic materials. Whoever holds the seed phrase, knows the passphrase, or controls the hardware wallet can produce valid signatures. This capability emerged through choices made during the deceased's lifetime—sharing materials with someone they trusted, setting up a multisig arrangement with designated keyholders, or storing backup information where someone could find it. The capability is technical, independent of legal appointment, and utterly indifferent to what any court or document might say about who has the right to use it.

These two roles arise through completely different processes that may never have been coordinated. When someone writes a will, they think about legal succession and fiduciary responsibility. When someone sets up bitcoin custody, they think about security and technical reliability. The will gets drafted by an attorney focused on legal requirements. The custody gets set up with tools focused on cryptographic security. Neither process automatically considers the other, and the people involved in each may be entirely unaware that the other exists.

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Why the Roles Often Diverge

Executors are often chosen for their reliability, relationship to the deceased, and ability to handle administrative tasks. A sibling, a spouse, or a trusted friend who can manage paperwork and navigate institutions makes a sensible executor choice. Technical capability with bitcoin is not typically a selection criterion because most estate planning professionals do not think to ask about it. The result is executors who are well-suited to traditional estate administration but may have no bitcoin knowledge whatsoever.

Bitcoin signers, by contrast, are often chosen for their technical competence and the deceased's trust in their discretion. A friend who helped set up the wallet, a colleague who understands the technology, or a relative who shares the deceased's interest in bitcoin may have been given signing capability precisely because they could be trusted to handle it competently. Whether this person is also suited to executor duties—patient, organized, willing to deal with courts and accountants—may never have been considered.

The deceased may not have consciously chosen to separate these roles at all. They named an executor in their will years ago, perhaps before they owned bitcoin. They shared signing capability with someone else more recently, when setting up or modifying their custody arrangement. The separation happened over time, through independent decisions that were never reconciled into a coherent plan. Now that the deceased is gone, the unreconciled decisions create a situation neither role-holder expected.

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What Divergence Creates

When the executor lacks signing capability, they face a gap between their duties and their means. They are legally responsible for the bitcoin as an estate asset. They may need to value it for estate tax purposes, protect it from loss, and eventually distribute it to beneficiaries. But they cannot actually touch it. Someone else holds that capability, and the executor must somehow work with that person to accomplish anything related to the bitcoin. The executor's legal authority, comprehensive for every other asset, provides no leverage here.

When the signer lacks executor authority, they hold capability without legal standing to use it. They can move the bitcoin, but doing so might constitute misappropriation of estate assets. They may have ideas about what the deceased would have wanted, but those ideas lack legal weight compared to the will and the executor's directions. Their possession of signing capability makes them necessary to any bitcoin-related action, but their lack of authority makes independent action legally problematic.

Neither party alone can accomplish what estate administration requires. The executor needs the signer's cooperation to access the bitcoin. The signer needs the executor's direction to act legitimately. This mutual dependency may work smoothly if the parties trust each other and agree on how to proceed. It may become contentious if they disagree about timing, valuation, distribution, or anything else. The structure creates points of friction that would not exist if both roles resided in the same person.

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Trust and Mistrust Between Roles

The relationship between executor and signer depends heavily on their prior relationship to each other and to the deceased. Perhaps they know each other well and have worked together before—a spouse as executor and a close family friend as signer, for example, who coordinated during the deceased's lifetime. Perhaps they are strangers who share only their separate connections to the deceased—a professional executor who never met the technical friend who holds the keys. The prior relationship shapes how the necessary cooperation unfolds.

Executors may view signers with suspicion, wondering why the deceased trusted this person with such powerful capability and whether that trust was warranted. The signer has the ability to move bitcoin unilaterally, which creates obvious risks from the executor's perspective. Did the deceased really intend for this person to have this power? Has the signer already moved some bitcoin before the executor became involved? These questions arise naturally even when they have no basis in reality, simply because the capability creates the possibility.

Signers may view executors with their own suspicion, wondering whether this legally-appointed administrator truly understands the deceased's wishes regarding the bitcoin. Perhaps the deceased told the signer things they never put in writing—intentions, preferences, concerns about certain beneficiaries. The signer may feel they know what the deceased would have wanted better than the executor does, yet find themselves subordinate to someone less informed about this particular asset. Resentment can build even when everyone acts in good faith.

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Conflict Scenarios

Disagreements about timing create one category of conflict. The executor may want to liquidate the bitcoin promptly to pay estate taxes or satisfy creditors. The signer may believe the deceased would have wanted the bitcoin held for beneficiaries rather than sold at what the signer considers an unfavorable price. Neither has unilateral power: the executor cannot force the signer to sign, and the signer cannot refuse indefinitely without creating legal exposure. The disagreement persists without clear resolution mechanisms.

Disagreements about distribution create another category. The will specifies how estate assets pass to beneficiaries, but it may not address bitcoin specifically or may use language that the executor and signer interpret differently. Should the bitcoin be distributed in kind or converted to cash first? Should one beneficiary receive all of it or should it be divided? The executor makes these decisions legally, but the signer controls whether and when they actually happen. Persistent disagreement can delay distribution indefinitely.

Personal conflicts unrelated to bitcoin can spill into this arena as well. If the executor and signer have independent grievances—family disputes, business disagreements, or simple personal animosity—the bitcoin situation provides a venue for those conflicts to play out. The signer can drag their feet on signing as a way to frustrate the executor. The executor can make decisions about the bitcoin specifically to disadvantage the signer or people the signer cares about. The asset becomes entangled in disputes that preceded it.

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When Signers Act Unilaterally

Technical capability exists independent of legal authority, which means signers can move bitcoin without executor permission. Nothing in the blockchain prevents this. No technical barrier requires the executor's approval or even awareness. The signer who decides to act unilaterally faces potential legal consequences but not technical ones. The bitcoin moves the same way regardless of whether the movement is authorized.

Unilateral action by signers creates serious complications for estate administration. The executor may not know the bitcoin has moved until they attempt to account for it and find it gone. They may face questions from beneficiaries, courts, or tax authorities about what happened to an asset they were supposed to protect. They may need to pursue the signer legally to recover the bitcoin or its value—a process that takes time, costs money, and may not succeed.

Even signers acting with good intentions may take unilateral action that creates problems. Perhaps they believe they know what the deceased wanted and act on that belief without coordinating with the executor. Perhaps they move the bitcoin to what they consider safer storage during the uncertainty of estate administration. Perhaps they distribute some portion directly to a beneficiary they believe the deceased would have prioritized. Each of these actions, however well-intentioned, disrupts the executor's administration and may trigger legal liability for the signer.

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When Executors Lack Leverage

Traditional estate administration gives executors substantial leverage over assets. Banks and brokerages comply with executor instructions. Courts enforce executor authority. Legal mechanisms exist to compel cooperation from those who resist. Bitcoin signers operate outside these mechanisms because no institution mediates their relationship to the asset. The executor's usual tools—letters testamentary, court orders, threats of legal action—may influence behavior but cannot force signing to occur.

Legal action against a non-cooperative signer is possible but imperfect. Courts can order signers to cooperate with estate administration. Contempt proceedings can punish non-compliance. But even a signer who has been ordered to sign might claim inability—lost keys, forgotten passphrases, technical problems—that a court cannot easily disprove or remedy. The enforcement mechanisms designed for institutional assets work poorly for assets controlled by cryptographic materials that may or may not exist in usable form.

Executors facing non-cooperative signers find themselves in unfamiliar territory. Their training and experience prepared them to work with institutions that recognize their authority. Now they must negotiate with an individual who holds technical capability that the executor cannot compel and may not fully understand. The power dynamic differs from anything in traditional estate practice, and executors may struggle to adapt their approach accordingly.

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Conclusion

The tension described by executor authority vs bitcoin signer emerges when legal responsibility and technical capability reside in different people. Executors hold legal authority to administer estate assets including bitcoin, but they may lack the cryptographic materials needed to actually move it. Signers hold technical capability to produce valid transactions, but they may lack legal authority to direct where the bitcoin goes. Neither party alone can accomplish estate administration of the bitcoin.

This divergence arises because executor selection and custody setup are separate processes that may never have been coordinated. The will names an executor based on legal and administrative considerations. Custody arrangements share signing capability based on technical and trust considerations. When the deceased dies, these independent choices collide, creating relationships and dependencies that may not have been anticipated or desired.

The resulting dynamic can range from smooth cooperation to outright conflict depending on how the parties relate to each other. When trust and agreement exist, the separation of roles adds friction but remains manageable. When mistrust or disagreement exists, the separation creates leverage for conflict that traditional estate mechanisms struggle to resolve. The blockchain does not care about legal authority, and legal authority cannot directly compel cryptographic signing.

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System Context

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