MSTR Cat

Crypto Law/Level IX · Death, divorce and disputes/9.1 Inheritance/Lesson 2

Wills, keys and secrecy

Why a will is the wrong place for a recovery phrase, what becomes visible when a will is lodged or probated, and how the dispositive words and the access secrets can live in different documents.

Education, not legal, tax or investment advice. Crypto law differs between countries and states and changes often. Check the current rules where you live with a qualified lawyer or tax adviser before you act.

The lean path

The cheapest, lowest-tax, simplest and most private route the law allows, best first. Each step names the rule it rests on and the condition that keeps it lawful.

  1. Cheapest valid will where offered: California’s statutory will (Probate Code §6240) is a free fill-in form; it must be signed before two adult witnesses and no words may be added, so crypto passes under its general residue clause.
  2. Holographic wills cost nothing: Arizona’s A.R.S. §14-2503 accepts a will whose signature and material provisions are in the testator’s handwriting, without witnesses; only some states allow this, so check the state of residence first.
  3. Keep secrets and addresses out of every will: use a general clause covering all digital assets and keep access data in a separate private document, because wills are lodged with courts and probate files are often public.
  4. Avoid the public file entirely where possible: assets passing by trust, payable-on-death or account designations, or by small-estate affidavit, never go through probate; nonprobate transfers still remain reachable by the estate’s creditors under laws such as A.R.S. §14-6101(C).
  5. A self-proving affidavit under A.R.S. §14-2504, signed before a notary with the witnesses, spares a later court hearing on due execution; it costs a notary fee now and does not make the will’s contents private.

MaterialsCalifornia Probate Code §8200, on delivering a will to the court after deathArizona Revised Statutes §14-2502 and §14-2513, the Uniform Probate Code rules on will formalities and separate listsCalifornia Probate Code §331, on opening a deceased person’s safe deposit boxThe GOV.UK service ‘Search probate records for documents and wills’ (England and Wales)

Wonder

  1. Can a recovery phrase simply be written into a will?
  2. Who gets to read a will after the person dies?
  3. If a will leaves ‘all my bitcoin’ to someone, how does anyone know what that covers?

Explore

  1. A will does two jobs for crypto: it says who receives the holdings, and it names an executor (also called a personal representative) with legal power to collect them. It is a poor place for secrets. Before death a will passes through a lawyer’s office and is signed in front of witnesses; after death it is usually lodged with a court, and probate files are often public. Anything written in it, whether a recovery phrase, a password or a wallet address, should be treated as readable by strangers. Because blockchains are public (lesson 1.1.5), even a listed address exposes its balance and full transaction history.
  2. Lodging is often compulsory. In California, Probate Code §8200 requires anyone holding a will to deliver it to the clerk of the superior court within 30 days after learning of the death, unless a probate petition is filed first, and makes a custodian who fails to do so liable for resulting damages. Many US probate courts keep estate files open to public inspection; Richland County, South Carolina, for example, says its estate records are open to the public. In England and Wales, the government’s online probate search lets users find probate records and order a copy of a probate record, including the will.
  3. The will itself must meet state formalities. Arizona’s version of the Uniform Probate Code, A.R.S. §14-2502, requires a paper will to be in writing, signed by the testator and signed by at least two witnesses; §14-2503 also accepts a holographic will whose signature and material provisions are in the testator’s handwriting. These rules exist so a court can trust the document. They do nothing to keep its contents private. Formalities differ from state to state and country to country, so a will drafted for one place may not be valid, or may be read differently, somewhere else.
  4. Many Uniform Probate Code states let a will refer to a separate signed or handwritten list that disposes of tangible personal property other than money, which can be changed later without re-signing the will (A.R.S. §14-2513). It is tempting to use such a list for crypto. But coins are not tangible property: the rule clearly reaches a hardware wallet as a physical object, not clearly the coins its keys control. A will can instead dispose of digital assets in general terms, for example ‘all digital assets, including cryptocurrency held in any wallet or account’, while the access information sits in a separate, non-public document (lesson 9.1.7).
  5. Storage outside the will has its own exposure. Under California Probate Code §331, a person who has the key to a deceased person’s sole-name safe deposit box may, with a death certificate and proof of identity, open it under the bank’s supervision and inventory its contents before any executor is appointed; the bank photocopies any wills and trust instruments found. A recovery phrase on paper in that box may therefore be seen by a relative and a bank employee before a court has chosen anyone. An envelope left with a lawyer shifts the risk instead: the firm now holds a secret that is as good as the coins.
  6. A practical check: list every document in an estate plan (will, trust, power of attorney, letters, notes) and mark which ones a court, bank, witness or adviser could see. For each crypto holding, confirm that the words saying who gets what sit in a document with legal force, and that no access secret appears in any marked document. Then confirm that the executor named in the will can learn the holdings exist; a will leaving ‘my bitcoin’ to someone achieves little if no one can find it (lesson 9.1.1). Electronic wills, permitted in some states under the Uniform Electronic Wills Act of 2019, raise the same questions.

Key facts

  • California Probate Code §8200 requires the custodian of a will to deliver it to the superior court clerk within 30 days after learning of the testator’s death, unless a probate petition is filed earlier.
  • Arizona’s A.R.S. §14-2502 requires a witnessed paper will to be signed by at least two witnesses.
  • Under A.R.S. §14-2513, a will may refer to a separate written list disposing of items of tangible personal property other than money.
  • Under California Probate Code §331, a person with the key may open a deceased person’s sole-name safe deposit box before letters are issued, under bank supervision, to inventory it.
  • In England and Wales, the government’s online probate search allows users to order a copy of a probate record, including a will.
  • A wallet address written into a public document lets anyone view that address’s balance and transaction history on the blockchain.

Exercise nine, six, three, one

9CollectList up to 9 documents or places where information about your crypto, or that of someone whose estate you might help with, is currently written down (some lists are shorter), such as a will, a notebook, a password manager, an email, a safe deposit box or a lawyer’s file.
6ClusterSort them into 6 categories: documents a court will receive, documents a bank or third party holds, private documents at home, digital records, documents that contain an access secret, and documents that only describe holdings.
3DistillReduce the 6 categories to 3 groups: safe to be seen by strangers, safe only in trusted hands, and containing secrets that should not be there.
1CrystallizeWrite 1 sentence explaining, in your own words, why the words that leave crypto to someone and the secret that controls it usually belong in different documents.

Fact check

Dates, figures and claims checked against the published sources listed below.

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