★ The Companion ★
Bitcoin inheritance is half cryptography and half paperwork. The vault story handles one half. This page handles the other.
— Background, not legal advice. The drafting belongs to a real attorney in the state where the trust is formed.
★ Chapter I ★
Who legally owns the vault — and why that question matters more than the multisig.
The default vehicle is a revocable living trust. David creates it. David can amend it or tear it up while he's alive. The trust — not David personally — is the legal owner of the bitcoin. When David dies, his successor trustees step in by the terms of the document, and the assets never enter probate court.
That last sentence is the entire point. Probate is public, slow, and expensive. A trust skips it. Sarah and Marcus take over with the authority already on file, instead of a judge appointing a personal representative six months later.
The companion documents on David's folio do the work the trust alone can't:
Two pieces specific to Bitcoin that most boilerplate trusts miss:
★ Chapter II ★
The IRS treats Bitcoin as property, not currency. That changes everything below.
The biggest tax fact in inheritance planning, and the one most people don't know. If David bought Bitcoin at $5,000 a coin and it's worth $200,000 a coin when he dies, his heirs inherit at the $200,000 cost basis — not the $5,000 he paid. The capital-gains liability on that appreciation is erased. The mechanism is IRC §1014. This single rule is the reason "hold until death" beats "gift during life" for most families on tax math alone.
Estates above the federal exemption pay tax on the excess at rates up to 40%. The exemption has moved with legislation — check the current amount with Marcus. A vault holding meaningful Bitcoin can sit on either side of the line, especially after price appreciation. The exemption can also change between drafting and death, which is why the trust review is annual, not "once and done."
Most states have no estate tax. A minority do — Massachusetts, Oregon, Washington, Illinois, Hawaii, and a handful of others — with exemptions much lower than federal. Six states levy an inheritance tax paid by the recipient. State of residence controls, not state of trust formation, so moving to a no-tax state late in life can be its own planning move.
If David wants to seed Sarah's key or fund the children's sub-trust before he dies, that's a gift. There's an annual exclusion per recipient and a lifetime exemption shared with the estate exemption. Crossing the line triggers Form 709 and chips at the lifetime number. Worth knowing before any meaningful transfer.
★ Chapter III ★
The story names Marcus as trustee. The story does not name his fee schedule. That has to live in writing.
There are three common ways to compensate a trustee. Each one works; each one has a failure mode on a Bitcoin vault.
Corporate trustees charge 0.5%–1.5% of trust assets per year. Bad fit for Bitcoin. A 1% fee on a vault that triples in two years means the fee tripled too, with no extra work done. The compensation should track effort, not price.
Marcus's normal attorney rate. Every hour gets a line item. Cleanest for low-touch arrangements like this one. The risk: unpredictable annual cost, and an incentive misaligned at the margins.
A stated fee for trust setup. A stated annual fee for review and reaffirmation. A stated fee for the inheritance event itself. Hourly fallback for anything outside scope. Fits the family vault's rhythm — discrete tasks, predictable cadence.
Whatever the structure, it lives in two documents — not one.
The trust also indemnifies the trustee for acts taken in good faith — the family agrees to defend Marcus against claims that arise out of doing his job correctly. Marcus carries his own fiduciary liability insurance as a second layer, separate from his malpractice policy.
★ Chapter IV ★
Marcus is David's attorney and a co-trustee. The bar rules have something to say about that.
Attorney-trustees are common. They are also one of the most regulated relationships in the bar's rule book, because the potential for self-dealing is obvious. Most state rules require some combination of:
None of this kills the arrangement. It's standard practice and attorneys do it cleanly every day. The page just shouldn't pretend the dual role is unremarkable — the disclosure paperwork is its own document, and it's there for the family's protection.
★ Chapter V ★
Four other paths through the same legal layer. Each one trades something different.
Casa is a custody service, not a trustee and not a legal fiduciary. They hold one key in the multisig. Their inheritance product is a video-verified recovery walkthrough their team runs with your beneficiary — operationally smooth, legally bolted onto whatever trust you bring. You still need your own attorney, your own trust document, and your own fee structure. Casa is the technical co-pilot; the paperwork is yours.
A Lloyd's-of-London policy backs the dollar value of the vault. The architecture (Trident Vault, miniscript time-locks) is close to what the family vault uses. The legal wrapper is different: AnchorWatch holds qualified-custodian status, which puts them under RIA-style regulatory oversight. The insurance policy itself is a legal instrument with claim conditions, exclusions, and termination triggers — and the premium scales with vault value. You still bring the trust structure on top.
Collaborative-custody multisig with an actual chartered trust company behind it — Unchained Trust Company, South Dakota. That changes the regulatory picture meaningfully. They offer Bitcoin IRAs and trust accounts through the chartered entity and maintain a referral network of estate attorneys. Closer to a one-stop shop than Casa; further from "the family owns every piece" than the family vault.
A different rail entirely. The IRA wrapper provides tax deferral and a simple beneficiary designation that skips probate without needing a trust at all. The custodian is holding the keys, not you. Tradeoff is explicit: you trade self-custody during life for clean legal handling at death.
Self-custody plus a family attorney plus a revocable living trust. No company on the recovery line, no premium tied to vault value, no chartered trust company. Marcus is named on the engagement letter. The fee schedule is per-task and on file. The trust owns the bitcoin and probate never starts. Every piece is visible and unbundled.
★ Chapter VI ★
Five documents. Each one says one thing the others don't.
Who the trustees are. How succession works. What the trustee gets paid. RUFADAA digital-asset language. Indemnification of trustees for good-faith acts. The children's sub-trust.
Backstop for anything David forgot to retitle into the trust. Names a guardian for minor children. Does the work no trust can do alone.
Marcus's attorney-client agreement. Names him in his dual role. Discloses the conflict. Records the client's consent. Specifies the fee schedule — the per-task version recommended above.
For the months before death, not the moment of it. Lets Sarah and Marcus make medical and financial decisions while David is alive but can't act for himself.
Marcus's own insurance, separate from his malpractice line. Covers him for claims arising out of his trustee role. The trust pays for it as a normal trust expense — and the page should say so on Marcus's folio.
★ Note from the publisher ★
This page is background, not legal advice. Estate, tax, and bar rules vary by state and change with legislation. The trust and its companion documents must be drafted by a licensed attorney in the state where the trust is formed.