Is My Bitcoin Lost If I Die: Modeled Custody Behavior at Death
Whether Bitcoin Survives After Holder Death
This memo is published by CustodyStress, an independent Bitcoin custody stress test that produces reference documents for individuals, families, and professionals.
What Death Does to a Custody System
A holder owns bitcoin. The holder wonders what happens to that bitcoin after death. The holder asks: is my bitcoin lost if I die? This question assumes a binary answer. The reality is not binary. The answer depends on how the custody system behaves when the holder is no longer present.
What follows covers when bitcoin becomes effectively lost at death versus when it remains recoverable. It models custody behavior under death as a stress condition. It does not provide reassurance or guidance.
What Death Does to a Custody System
Death removes the holder from the custody system. The holder can no longer act. The holder can no longer explain. The holder can no longer intervene. The holder can no longer remember passwords or locate backups.
The custody system continues to exist after death. The bitcoin remains on the blockchain. The keys remain wherever they were stored. Nothing about the bitcoin itself changes. What changes is who can interact with it.
Bitcoin custody after death depends on whether the system can function without the holder. If access paths existed independently of the holder, recovery may proceed. If access paths existed only through the holder, recovery may fail.
Bitcoin Is Not Automatically Lost
Bitcoin is not automatically lost when a holder dies. The bitcoin does not disappear. The bitcoin does not expire. The bitcoin remains exactly where it was, controlled by the same keys.
The question is whether anyone can reach those keys. If heirs can find and use the keys, the bitcoin is not lost. If heirs cannot find or use the keys, the bitcoin becomes inaccessible. Inaccessibility is not the same as loss, but the practical result may be the same.
Is bitcoin lost when you die? Not automatically. The bitcoin persists. Access to it may or may not persist.
Bitcoin Is Not Automatically Recoverable
Bitcoin is also not automatically recoverable when a holder dies. Ownership in a legal sense may pass to heirs. Technical access does not automatically follow. A will can name who inherits the bitcoin. A will cannot produce the keys.
The scenario in which heirs inherit bitcoin legally but cannot access it technically is common. The heirs own the bitcoin. The heirs cannot move it. The heirs cannot spend it. Legal ownership persists while practical control disappears.
What happens to bitcoin when you die depends on custody system state, not on legal documents alone.
The Range of Outcomes
Death produces a range of outcomes for bitcoin custody. At one end, recovery happens immediately. The heir knows where the keys are. The heir knows how to use them. The heir accesses the bitcoin within days.
At the other end, the bitcoin becomes permanently inaccessible. No one knows where the keys are. No one can find backups. No one understands the custody arrangement. The bitcoin remains on the blockchain, visible but unreachable.
Between these extremes sit many intermediate states. Partial recovery. Delayed recovery. Recovery with professional help. The outcome depends on what the custody system looked like when the holder died.
Key Dependency
Bitcoin access requires keys. The keys may exist on a hardware device. The keys may exist as a seed phrase on paper. The keys may exist in the holder's memory. The keys may exist in multiple places or only one.
Access fails when required keys exist only in the holder's possession. If the holder memorized a password and told no one, that password dies with the holder. If the holder stored a seed phrase in a location only the holder knew, that location may never be found.
Bitcoin lost at death often means keys lost at death. The bitcoin remains. The path to it disappears.
Knowledge Loss
The holder knows things about the custody system. The holder knows which wallets exist. The holder knows where backups are stored. The holder knows what passwords protect what.
This knowledge lives in the holder's mind. When the holder dies, the knowledge disappears. Heirs inherit whatever was written down. Heirs do not inherit what was only remembered.
The scenario in which a holder understood a complex custody arrangement but documented only part of it creates partial knowledge loss. Heirs find some information. Heirs lack other information. Heirs cannot reconstruct what the holder knew.
Authority Versus Access
Legal authority and technical access are different things. A will grants authority. A court confirms authority. An executor receives authority. None of these produce keys.
The scenario in which an executor has full legal authority over bitcoin but cannot access it exposes this gap. The executor can legally manage the bitcoin. The executor cannot technically reach the bitcoin. Authority exists. Access does not.
Is my bitcoin lost if I die? The answer depends partly on whether authority translates into access. If heirs can convert legal ownership into technical control, recovery proceeds. If heirs cannot make this conversion, recovery stalls.
Discovery Failure
Recovery requires finding custody artifacts. The heir needs to find the hardware wallet. The heir needs to find the seed phrase. The heir needs to find documentation.
Discovery fails when heirs cannot locate or recognize critical artifacts. A hardware wallet looks like a small electronic device. An heir may not recognize it. A seed phrase looks like a list of words. An heir may not connect it to bitcoin.
The scenario in which heirs search a home and fail to recognize a hardware wallet creates discovery failure. The artifact exists. The heir encountered it. The heir did not understand what it was.
Recognition Problems
Finding something is not the same as recognizing it. An heir may find a piece of paper with twenty-four words and not know it is a seed phrase. An heir may find a small device and not know it is a bitcoin wallet.
Recovery depends on heirs understanding what they find. If heirs lack bitcoin knowledge, recognition becomes a barrier. The physical search succeeds. The conceptual search fails.
What happens to bitcoin when you die includes what heirs do with what they find. If heirs discard unrecognized artifacts, recovery fails. If heirs preserve unrecognized artifacts, recovery may later succeed.
Timing Finality
Death freezes the custody system in its last operational state. Whatever documentation existed at death remains. Whatever backups existed at death remain. Nothing new gets added.
The holder can no longer update documentation. The holder can no longer create new backups. The holder can no longer explain the system to heirs. The custody arrangement becomes fixed at the moment of death.
Bitcoin custody after death reflects a snapshot. The snapshot captures whatever state the system was in. If the system was well-documented, the snapshot is useful. If the system was poorly documented, the snapshot is incomplete.
The Frozen State
After death, heirs interact with a frozen system. They cannot ask the holder questions. They cannot request clarification. They cannot verify assumptions with the person who built the system.
The scenario in which heirs find incomplete documentation creates interpretation problems. The documentation mentions a backup. The documentation does not say where the backup is. The heirs cannot ask. The holder is not present to answer.
Recovery in a frozen system proceeds through inference and search. Heirs guess what the holder meant. Heirs search locations that seem plausible. Heirs try combinations that might work. The holder cannot confirm or correct.
Exchange-Held Bitcoin
Some bitcoin sits on exchanges. Exchanges are companies with customer service processes. When a holder dies, heirs may be able to contact the exchange. The exchange may grant access through an estate process.
Exchange-held bitcoin follows a different path than self-custodied bitcoin. The exchange holds the keys. The exchange can verify heir identity through legal documents. The exchange can transfer account access based on probate.
Is bitcoin lost when you die if it sits on an exchange? Not automatically. The exchange process may be slow and difficult, but a path exists. The institution provides a bridge between legal authority and technical access.
Self-Custodied Bitcoin
Self-custodied bitcoin has no institutional bridge. The holder controlled the keys directly. There is no company to contact. There is no customer service to call. There is no estate process that produces keys.
Self-custodied bitcoin lost at death scenarios differ from exchange scenarios. The bitcoin exists. The keys exist somewhere. No institution can help heirs find them. Recovery depends entirely on what the holder left behind and whether heirs can find and use it.
The scenario in which a holder self-custodied all bitcoin and left no documentation creates maximum recovery difficulty. The bitcoin exists. The path to it may not be discoverable.
Partial Recovery
Recovery can be partial. A holder may have bitcoin in multiple places. Heirs may recover some and not others. The exchange account gets accessed. The hardware wallet does not.
Partial recovery creates uncertainty. Heirs know some bitcoin was recovered. Heirs do not know if all bitcoin was recovered. There may be more bitcoin that heirs never found. The holder is not present to confirm the total.
What happens to bitcoin when you die includes the possibility that some survives and some does not. The outcome is not always all-or-nothing.
Delayed Recovery
Recovery can be delayed. Heirs may not find keys immediately. Years may pass. A forgotten box gets opened. A relative remembers something the holder said. A piece of paper turns up during a move.
Delayed recovery is still recovery. The bitcoin waited. The keys existed somewhere. Someone eventually found them. The bitcoin was ultimately accessible.
The scenario in which heirs recover bitcoin five years after death shows that inaccessibility can be temporary. What appears lost may later be found. The custody system did not fail permanently. It failed temporarily.
Permanent Inaccessibility
Some bitcoin becomes permanently inaccessible. The keys cannot be found. The keys were destroyed. The keys existed only in the holder's memory. No amount of searching produces them.
Permanent inaccessibility means the bitcoin remains on the blockchain forever, controlled by keys that no longer exist in any recoverable form. The bitcoin is visible. The bitcoin cannot be moved. The bitcoin becomes effectively removed from circulation.
Is my bitcoin lost if I die? It may be, if recovery paths do not exist. The bitcoin persists, but if no one can ever access it, the practical result resembles loss.
What Determines the Outcome
The outcome depends on custody system state at death. Did access paths exist independently of the holder? Did documentation describe how to recover? Did heirs know where to look? Did heirs understand what they found?
Intent does not determine the outcome. A holder who intended for heirs to recover the bitcoin but left no usable path created an intention without a mechanism. A holder who documented everything but told no one created a mechanism that heirs might not find.
Bitcoin custody after death reflects system state, not wishes. The system either supports recovery or it does not.
Outcome
When a holder dies, bitcoin is not automatically lost and not automatically recoverable. The bitcoin persists on the blockchain. The keys persist wherever they were stored. What changes is whether anyone can interact with them.
Recovery depends on custody system behavior. Access fails when keys exist only through the holder. Knowledge disappears when documentation was incomplete. Authority separates from access when legal ownership does not produce technical control. Discovery fails when heirs cannot find or recognize critical artifacts.
Is my bitcoin lost if I die? The question reframes as: does the custody system support recovery when the holder is absent? The answer varies. The outcome ranges from immediate recovery to permanent inaccessibility based on system state at death, not on intention or legal status.
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