What to Tell Family About Bitcoin

Information Disclosure Balance for Family Members

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

The Security-Access Tension

Deciding what to tell family about bitcoin involves a fundamental tension. More information enables access; less information provides security. The holder must navigate between extremes—telling everything creates exposure while telling nothing creates access failure at death or incapacity. This disclosure decision shapes both security during life and succession after it.

Different family members may warrant different disclosure levels. Trust, capability, and relationship dynamics vary across a family. A single disclosure policy may not fit all family members equally well. The decision is not just what to tell, but what to tell whom.

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The Security-Access Tension

Security principles favor information restriction. The fewer people who know about bitcoin holdings, the lower the risk of social engineering, theft, or coercion. Every person who knows represents a potential information leak or attack vector. Maximum security minimizes who knows anything.

Access requirements favor information sharing. If no one knows bitcoin exists, no one can access it when needed. If no one knows where materials are stored, materials cannot be retrieved. If no one understands custody procedures, procedures cannot be executed. Maximum access requires information distribution.

These imperatives conflict directly. What increases security decreases access readiness. What improves access readiness compromises security. No disclosure level optimizes both simultaneously. The holder must choose a position along this tradeoff rather than avoid the tradeoff entirely.

Time affects the optimal balance. During the holder's healthy lifetime, security may dominate. As the holder ages, becomes ill, or approaches circumstances where access by others becomes likely, access considerations may deserve more weight. The optimal disclosure point may shift over time.

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Categories of Information

Not all information carries equal sensitivity. Different categories of bitcoin information have different security implications and different access utility. Disclosure decisions can vary by category rather than being all-or-nothing.

Existence information confirms that bitcoin is held. Knowing bitcoin exists does not enable access but does prevent the asset from being overlooked entirely. This is often the least sensitive disclosure—acknowledging ownership without revealing details.

Magnitude information indicates approximate value. Knowing rough value helps family understand significance without revealing exact holdings. "A meaningful amount" or "enough to matter" communicates importance without precision that could be exploited.

Location information specifies where custody materials are stored. This information enables finding materials but does not enable using them alone. Knowing the seed phrase is in a safe deposit box matters, but only alongside other information needed for access.

Access information includes seed phrases, PINs, passphrases, and procedures. This is the most sensitive category—anyone with complete access information can take the bitcoin. Disclosure of access information carries the highest security risk.

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Different Family Members

Family members differ in trustworthiness, capability, and relationship stability. Uniform disclosure to all family may not serve the holder's interests as well as differentiated disclosure.

Trustworthiness varies and may not correlate with relationship closeness. A sibling may be completely trustworthy while an adult child may have problems—addiction, financial irresponsibility, unstable relationships—that make full disclosure risky. Trust assessment requires honest evaluation, not wishful thinking.

Capability varies independently of trust. A trusted spouse may lack technical capability. A technically capable child may not be fully trusted. The person most trusted to receive information may not be the person most able to act on it. These dimensions can be addressed separately through differentiated disclosure.

Relationships change over time. A spouse trusted during marriage may become adversarial during divorce. A responsible child may develop problems. An estranged family member may reconnect. Disclosure decisions made at one time may need revision as relationships evolve.

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Staged Disclosure Approaches

Disclosure need not happen all at once. Staged approaches release information incrementally—some now, more later, complete access only at the right moment. These approaches attempt to balance security and access across time.

Immediate disclosure to some, deferred disclosure to others creates tiered access. A spouse might know location information now while full access information is sealed for discovery after death. Different family members have different information appropriate to their current role.

Trigger-based disclosure releases information upon specific events. Death activates estate planning documents. Incapacity might trigger other mechanisms. The holder controls information during life while ensuring access when it matters.

Verification-required disclosure adds conditions to information release. A family member who satisfies certain conditions—identity verification, legal process completion, multiple-party agreement—receives full information. These conditions provide security while ensuring legitimate access eventually occurs.

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Disclosure Methods

How information is disclosed affects both security during transmission and accessibility later. Different methods have different properties that make them suitable for different disclosure scenarios.

Verbal disclosure leaves no record. Conversations do not create documents that can be found by others. But verbal information is vulnerable to forgetting, misremembering, and loss when the listener becomes unavailable. Verbal disclosure trades documentation risk for reliability risk.

Written disclosure creates records that persist. Documents can be stored, found, and followed. But documents can also be found by unintended parties. Where written disclosure is stored, how it is protected, and who might access it all affect its security.

Layered disclosure separates information across methods and locations. Part of the information lives in one place, part in another. Complete access requires assembling pieces from multiple sources. This approach reduces the risk of any single point of compromise while complicating legitimate access.

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Trust Dynamics

Disclosure decisions occur within family relationship contexts. Trust dynamics—both justified and unjustified—shape how disclosure decisions are made and received.

Excessive secrecy can damage relationships. Family members who feel excluded, distrusted, or uninformed may develop resentment. The security benefit of non-disclosure trades against relationship costs. Some holders keep secrets that harm family relationships more than disclosure would have risked.

Excessive disclosure can enable harm. Family members with problems—substance abuse, gambling, financial irresponsibility—may misuse information or access. Trust that ignores known problems leads to predictable negative outcomes. Some holders disclose to family members who should not receive the information.

Honest assessment requires seeing family clearly. Neither assuming all family members are trustworthy nor assuming none are serves the holder well. Each family member warrants individual assessment based on their actual history and current situation.

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Information Decay and Maintenance

Disclosed information may not remain accurate over time. As custody arrangements change, previously shared information becomes outdated. Disclosure is not a one-time event but an ongoing maintenance obligation.

Outdated information can be worse than no information. Family acting on stale instructions may make errors, create confusion, or believe they have completed access when they have not. Old information that no longer applies creates false confidence that impedes actual access.

Update discipline maintains accuracy. When custody changes, who needs to know? What information needs updating? How are updates communicated? Disclosure decisions include commitments to maintain the disclosed information over time.

Death eliminates the holder's ability to update. Whatever information family has at the moment of death is all they will ever have. Updates cannot occur afterward. This finality emphasizes the importance of keeping disclosed information current during life.

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Legal and Practical Considerations

Disclosure may have legal implications depending on jurisdiction and circumstance. It may also have practical effects on family dynamics beyond the immediate security-access tradeoff.

Estate planning may require some disclosure. Attorneys drafting wills or trusts may need to know about bitcoin to include it properly. Professional disclosure differs from family disclosure in confidentiality protections and purpose.

Tax situations may involve disclosure requirements. Accountants preparing returns may need information about holdings. These professional relationships have different confidentiality frameworks than family relationships.

Family expectations create social pressures. Some families share financial information openly; others maintain privacy. Cultural norms and family history shape what disclosure feels appropriate independent of security-access analysis. These social factors influence what decisions feel acceptable to make.

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Assessing Current Disclosure

Holders who have already made disclosure decisions—consciously or by default—can assess the current state. What does family currently know? Is this the right level of disclosure given current circumstances?

Default non-disclosure may not be intentional. Many holders have simply never discussed bitcoin with family. This default creates access gaps without conscious decision that the gaps are acceptable. Assessing current state includes recognizing implicit choices made through inaction.

Over-disclosure may have occurred casually. Conversational mentions, visible activity, or documents left accessible may have disclosed more than intended. The holder may not know exactly what family members have observed or inferred. Current disclosure level may exceed what the holder explicitly chose.

Gap analysis compares current state to desired state. What do family members know now? What level of disclosure serves the holder's interests? If these differ, what changes are needed? This analysis informs whether disclosure decisions need revisiting.

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Conclusion

Deciding what to tell family about bitcoin involves navigating the fundamental tension between security (less information) and access (more information). No disclosure level optimizes both simultaneously, so the holder must choose a position along this tradeoff.

Information categories differ in sensitivity—existence, magnitude, location, and full access information carry different risks and utilities. Different family members may warrant different disclosure levels based on trustworthiness, capability, and relationship dynamics. Staged disclosure approaches can balance security and access across time.

How information is disclosed, trust dynamics within the family, maintenance of disclosed information, and legal considerations all affect disclosure decisions. Holders assessing their current state may find that default non-disclosure or casual over-disclosure has positioned them differently than intentional decision-making would.

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