Does anyone have any good ideas on how one would pass on cryptocurrencies to family in the event of death?<p>I imagine you just need to pass on the type of wallet used, and the mnemonic recovery words so they can access the coins.<p>But you can't just leave those words in a plaintext will obviously. Any thoughts?
Shamir's Secret Sharing Scheme (ssss) would allow you to encrypt your recovery words in such a way that you could distribute the encrypted recovery words to N parties, and require the knowledge of K parties (n < k) to decrypt the secret.<p>ssss doesn't rely on any trusted party--for example, you could split into 5 "shares", and set a threshold of 3. Then distribute the shared amongst 5 of your most trusted friends (selecting them in such a way that it's unlikely they'll collude), and instruct them to only use their share of the secret when they've confirmed your death. 3 of them would have to "come together" (physically, or over a shared terminal or screen) and enter their "shares" to decrypt your recovery words. However, this would cause all 3 of them to know your recovery words.<p>To get around that, don't encrypt the recovery words themselves using ssss. Instead, encrypt the recovery words using a modern, strong, encryption algorithm, using a randomly generated key. Then use ssss to encrypt the randomly generated key, and share that.<p>Only give the ciphertext of the recovery words to the intended recipient upon death.<p>Instead of friends, you could also split the secret between your executor and the intended recipient/family remember, requiring consent from both.<p>Whatever you do, don't forget to write thorough instructions :)
It's no different from leaving any bank account to an heir. You can leave the key to a safety deposit box that the named heir has to physically be present to claim.<p>You should be careful about using technical solutions, like secret sharing, since this is not a technical problem. It is a legal problem, and you don't want parties to conspire to obtain the property contrary to your wishes.
Easiest thing is to liquidate and leave those assets in a will. Anything else has a non-trivial chance of loss without recourse (unlike liquidated currency). That being said if you had that much money in crytocurrencies you probably wouldn't want to leave it to a bank.
Store them in fully reconstructable deterministic wallet (the one that can be rebuilt from scratch using long enough passphrase only).
Split passphrase in 3 pieces (A, B, C) and store it in an envelope with instructions in three different, unrelated legal firms to be given to your heirs in case of your death.<p>Firm 1: A,B<p>Firm 2: C,B<p>Firm 3: A,C<p>This way:<p>- Your assets are protected from banks getting hold of your assets (including safety deposit boxes) in a future for whatever mayhem reasons.<p>- You assets are protected in case if any of these firms gets uncooperative, hacked, robbed or blackmailed to disclose password. Single firm cannot reconstruct your wallet - it doesn't have enough information.<p>- It's enough to have cooperation of 2 out of 3 firms = 2 letters to fully reconstruct the wallet.