Should you use a living trust for bitcoin inheritance?

First published: 02/23/2023
| Last updated: 02/23/2023
| -- min read

Everyone has to deal with passing assets to their loved ones eventually, and for inheritance purposes, bitcoin is no different than any other property you own. Living trusts allow you to maintain ownership over your assets while legally establishing your beneficiaries, and they have many benefits that can help the transfer of legal title to your bitcoin go smoothly in your absence. 

Wills vs. living trusts

The first thing you need to understand is the difference between a will and a living trust. They’re both legal tools for ensuring the title to your assets passes to your next of kin.

A will is a legal document that coordinates the distribution of your assets after death through a legal process called probate. Regardless of whether you are holding bitcoin, it’s never a bad time to work with a local attorney to have your will and other estate planning documents drawn up. These legal documents ensure the title to your bitcoin and other assets properly pass to your beneficiaries and will also establish who will manage the transfer of your estate—the executor. 

A living trust (often called a revocable living trust) is also a legal document which coordinates distribution of assets after your death, however unlike a will, a living trust does so outside of the probate process.

If you have a living trust drawn up by an attorney, any assets which are titled to your living trust before your death will avoid probate and pass entirely under the terms of the trust. Re-titling those assets to the living trust during life does not affect your access or ownership to those assets, as the trust terms state that you have unfettered use during your lifetime and may revoke or amend the trust terms at any time. 

Benefits of a living trust for bitcoin inheritance

If you only have a will, any property where title remains in your name generally must go through a legal process called probate. This process involves sharing information about your estate with your local probate office (which in some states may actually even be a court, and in others may be more like a government administrative office), allowing your possessions to be transferred to your beneficiaries in accordance with your will. 

On the other hand, any assets properly titled to your living trust avoid the probate process altogether. This has many benefits.


Probate varies substantially state to state, however in all states it involves some level of public records filing. Even in states where probate is not an intense or expensive process, typically your executor will have to file a document into the public record which lists your beneficiaries with their home addresses, along with the assets they are receiving (which would include your bitcoin). Titling your assets to a living trust before death ensures those assets pass outside probate, avoiding all of this information being put into public record.

Immediate access

A living trust also makes the distribution of assets smoother. Depending on your state, the probate process can take a long time—sometimes years—leaving your bitcoin in limbo for an extended period. With a living trust, on the other hand, your trustee will have immediate access after your death without any need to apply to any probate office or court, and can begin paying down your debts and distributing assets as soon as he deems practical.


In some states, like New Jersey, probate is a fairly straightforward and inexpensive (although public) process. In others, like California, probate is brutally slow and expensive, as your executor’s lawyer must ask a court’s permission for nearly every action of your executor and is entitled by law to a percentage of the estate. Most states fall somewhere between these extremes, some closer to New Jersey, while others are closer to California. Most of these costs can be eliminated altogether by properly titling your assets to a living trust before death to keep them out of probate.

Should I still establish a will?

It’s a common misconception that setting up a living trust means you won’t have a will or that having a will at all is bad. In reality, whenever an attorney draws up a revocable living trust, he also draws up a “pourover will” to act as a failsafe in case the revocable living trust fails for some technical reason. 

Critically, the potential privacy loss involved with a will doesn’t come from having the will itself; it comes from the will being probated. A properly set up and funded revocable living trust prevents the will from ever needing to be probated, meaning it effectively remains an unused emergency backup measure with no downside.

Learn more about bitcoin inheritance

Wills and living trusts primarily involve the transfer of title to your bitcoin, but the bitcoin inheritance process also requires that you think about possession. Not only do you need to ensure your executor or trustee has access to your bitcoin keys when you’re gone, they also need to know what to do with them. Multisig can come in handy for this, and tools like the Unchained Inheritance Protocol can help ensure all the details are accounted for. 

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