Table of Contents
- What Is a Bitcoin Letter of Instructions?
- Letter of Instructions vs Will vs Trust
- What to Include: The 8 Essential Sections
- What Never to Put in the Letter
- Template: Bitcoin Letter of Instructions Structure
- How to Store the Letter Securely
- The Multiple-Copy Strategy
- The Hardware Wallet Section in Detail
- Exchange and Custodian Account Section
- Your Advisory Team Section
- Keeping the Letter Current
- The Seed Phrase Companion Document
- Digital Tools for Estate Succession
- Integrating with Your Estate Plan
- Planning for Incapacity, Not Just Death
- Frequently Asked Questions
What Is a Bitcoin Letter of Instructions?
A letter of instructions (sometimes called a memorandum of instructions, side letter, or estate administration guide) is a non-legal document that provides practical guidance to your executor, trustee, or heirs about how to locate, access, and administer your Bitcoin after your death or incapacity.
Unlike a will or trust, the letter of instructions:
- Is not filed with a court and is not public record
- Has no legal effect on asset distribution — it is guidance, not direction
- Can be updated at any time without attorney involvement
- Can contain operational detail that would be inappropriate in a formal legal document
- Can be written in plain language rather than legal terminology
For Bitcoin holders, the letter of instructions fills a critical gap: the will and trust establish who gets the Bitcoin, but they do not and should not contain the practical information needed to actually find and access it. Without a letter of instructions, even a perfectly drafted estate plan can fail because the executor cannot locate the Bitcoin, does not know which custodian holds it, or — most catastrophically — does not know that the Bitcoin exists at all.
Letter of Instructions vs Will vs Trust
| Document | Legally Binding? | Public Record? | Primary Purpose | Contains Seed Phrases? |
|---|---|---|---|---|
| Will | Yes | Yes (after probate) | Distribute assets; name executor | Never |
| Revocable trust | Yes | Generally no | Hold and distribute assets; avoid probate | Never |
| Letter of instructions | No | No | Practical guidance: where is the Bitcoin, who to call | Never (location only) |
| Seed phrase storage document | No | No | Securely transmit private key material | Yes — stored separately with maximum security |
The letter of instructions and the seed phrase storage document are distinct and should be stored separately. The letter tells your heirs where the seed phrase is stored; the seed phrase document contains the actual key material. If both are in the same location, compromising that location exposes both your estate's roadmap and the keys to your Bitcoin.
What to Include: The 8 Essential Sections
Section 1: Overview of Bitcoin Holdings
A high-level summary of all Bitcoin held, organized by custody type. Not the actual amounts (which fluctuate with price) but the structure: "I hold Bitcoin in three places: a self-custody hardware wallet, a Coinbase account, and a trust held at [Trustee Name]." This gives your executor a map before diving into details.
Section 2: Exchange and Custodian Accounts
For each exchange or custodian account: the institution name, your account username or email address, the approximate holdings (updated regularly), the customer service phone number and website, and whether two-factor authentication is enabled and where the 2FA recovery codes are stored.
Section 3: Self-Custody Hardware Wallet Information
For each hardware wallet: the device type and model (Coldcard, Ledger, Trezor, etc.), the physical location of the device, where the seed phrase backup is stored (NOT the seed phrase itself — the location), any PIN information (stored separately or with seed phrase), and whether a passphrase (25th word) is used and where that is documented.
Section 4: Multi-Signature Setup (If Applicable)
If any Bitcoin is held in multi-signature custody, this section must explain the scheme (2-of-3, 3-of-5), who holds each key, where each key is stored, the wallet configuration file (PSBT coordination), and the name of the Bitcoin custody specialist who can assist the executor in coordinating a transaction.
Section 5: Bitcoin IRA and Retirement Accounts
For each Bitcoin IRA: the custodian name and contact information, account number (or last 4 digits), named beneficiaries on file, and the contact for beneficiary claims. Note whether the account is Traditional or Roth and remind the executor that the beneficiary designation governs, not the will.
Section 6: Trust and Entity Holdings
If Bitcoin is held inside a trust, LLC, or other entity: the entity name and jurisdiction, the trustee or manager name and contact, where the entity documents are stored, and the contact for the estate planning attorney who drafted the documents.
Section 7: Your Advisory Team
A complete contact list with full name, firm, phone, email, and role: estate planning attorney, CPA, financial advisor, Bitcoin custody specialist, trustee contact (if applicable), and executor or successor trustee. Tell your heirs to contact the estate planning attorney first — they will coordinate the rest.
Section 8: Immediate Action Priorities
A numbered list of the first steps your executor should take with respect to Bitcoin specifically: (1) Do not move any Bitcoin before consulting the estate attorney; (2) Secure all hardware devices; (3) Contact [custodian] at [phone] to notify of death and place a hold on the account; (4) Locate the sealed envelope in [location] before accessing any devices.
What Never to Put in the Letter
Never include in your letter of instructions:
- Bitcoin seed phrases or recovery phrases — store these in a separate, maximally secure document or location
- Hardware wallet PINs — store with or immediately adjacent to the hardware wallet, not in the letter
- Exchange passwords — can be stored in a password manager with its own secure succession plan
- Passphrase (25th word) for BIP39 wallets — store this separately from the 24-word seed phrase
- Multi-signature key material — the letter should reference the custody arrangement; the keys themselves require their own secure storage
- Specific Bitcoin amounts or addresses — these change with transactions and market prices; omit to avoid confusion
Template: Bitcoin Letter of Instructions Structure
How to Store the Letter Securely
The letter of instructions needs to be secure enough to protect sensitive account information — but accessible enough that the right people can find it quickly after your death or incapacity. This is a tension that requires deliberate planning.
Storage Options Ranked by Security and Accessibility
| Storage Location | Security | Accessibility | Best Use |
|---|---|---|---|
| With estate planning attorney | High | High (attorney contacted immediately) | Primary copy — attorney knows to produce it immediately at death |
| Home fireproof safe (known to executor) | Good | Good (executor has combination) | Home copy — executor can access without attorney |
| Bank safe deposit box | High | Lower (may require court order to open) | Not recommended as primary — can be inaccessible immediately after death |
| Encrypted digital file (password manager) | Good (depends on password security) | Good if executor knows master password | Digital backup — update simultaneously with paper version |
| With executor personally | Moderate | Excellent | Only if executor is highly trusted and understands Bitcoin security |
The Safe Deposit Box Trap
Many people store important documents in a bank safe deposit box — a seemingly obvious choice. But safe deposit boxes can become inaccessible immediately after death. In many states, the bank freezes access when they receive notice of a depositor's death, pending a court order or letters testamentary. If your executor needs to access your Bitcoin letter of instructions urgently in the first days after death, a safe deposit box may cause critical delays. Use a home fireproof safe or attorney storage as the primary location, with the safe deposit box as a backup only.
The Multiple-Copy Strategy
One copy of the letter is not enough. A single point of failure — fire, flood, the attorney relocating offices, the safe being inaccessible — can leave your heirs without guidance. Maintain at least three copies:
- Primary copy: With your estate planning attorney, in a sealed envelope labeled with your name and instructions for when to open it
- Home copy: In a fireproof safe to which your executor or spouse has the combination, with a note in your will referencing the safe's location
- Digital backup: An encrypted copy stored in a password manager or encrypted file, with the master password documented for your executor in a separate secure location
Each copy should be numbered and dated, so your executor knows which version is most current if they find multiple copies.
The Hardware Wallet Section in Detail
For most self-custody Bitcoin holders, the hardware wallet section of the letter of instructions requires the most care — because hardware wallets are the most technically complex component and the most likely to create access problems for non-technical heirs.
What Your Executor Needs to Know About Hardware Wallets
- What the device looks like and that it looks like an ordinary USB device or small electronic — so they recognize it when they find it
- The physical location of the device — be specific: "Third drawer of the desk in the home office, in a black cloth pouch"
- That they should NOT attempt to access it without the Bitcoin custody specialist present — a wrong PIN entered too many times can permanently wipe the device
- Where the seed phrase backup is stored — the letter tells them the location; the seed phrase itself is in that location
- Whether a passphrase (25th word) is used — if your wallet uses an additional passphrase for security, this is critical information. Without the passphrase, the seed phrase alone will restore a wallet with zero balance (the passphrase-protected Bitcoin is on a separate derivation path)
- The name of the Bitcoin custody specialist who should be contacted to assist with the access process
Multi-Signature Hardware Wallets
If any Bitcoin requires multiple hardware wallets to sign a transaction (2-of-3 multisig, etc.), the letter must explain this clearly. An executor who finds one hardware wallet and attempts to access the full Bitcoin balance with it will fail — and may panic, thinking the Bitcoin is lost. The letter should explain: "This wallet holds Key 1 of a 2-of-3 multi-signature arrangement. Key 2 is held by [Name] at [Location]. Key 3 is held by [Name/institution]. Contact [Bitcoin custody specialist] who can coordinate a transaction using any two of the three keys."
Exchange and Custodian Account Section
Exchange-held Bitcoin is the easiest type for heirs to access — but it requires prompt action to prevent complications. Most major exchanges have a formal estate claim process, and the longer the account sits dormant without notification, the greater the risk of complications.
Per-Exchange Information to Document
- Exchange name and full legal entity name (e.g., "Coinbase, Inc.")
- Your account email address (the executor will need this to initiate the claim)
- Customer service phone number and estate claims process URL
- Whether two-factor authentication is enabled — and where the backup codes or 2FA device is located
- Whether the account has withdrawal restrictions, KYC holds, or other flags that may affect access
- Any linked bank accounts that should be disconnected before the estate process
Bitcoin IRA Custodians Require Special Handling
Bitcoin IRA custodians (BitcoinIRA, Alto IRA, iTrust Capital, etc.) have a specific beneficiary claim process distinct from the estate claim process. The executor needs to know: (1) the custodian's name and contact, (2) that the account passes by beneficiary designation (not will), (3) who the named beneficiaries are, and (4) that named beneficiaries should contact the custodian directly and not wait for probate to be completed. See our guide on Bitcoin inherited IRA rules for what beneficiaries need to do once they make contact.
Your Advisory Team Section
The single most important entry in your letter of instructions is your estate planning attorney's contact information — clearly labeled "CONTACT FIRST."
Your executor is likely not a Bitcoin expert, an estate law expert, and a tax expert simultaneously. By directing them to the attorney first, you ensure that all subsequent actions are properly sequenced and legally sound. The attorney will coordinate the CPA, the custody specialist, the trustee, and any other professionals needed.
Who Should Be Listed and What Information to Include
- Estate planning attorney: Full name, firm name, direct phone, direct email, office address, and a note explaining which documents they hold (original will, trust document, copy of this letter)
- CPA / tax advisor: Full name, firm, contact, and a note about any tax filings in progress
- Bitcoin custody specialist: Full name, firm or independent, direct phone, a brief description of their role (e.g., "coordinates hardware wallet access and multi-sig transactions")
- Trustee (if applicable): Trust company name, trust officer name, direct phone, trust account number
- Financial advisor: If any Bitcoin is held through an advisor's platform, their contact and the account information
Keeping the Letter Current
A letter of instructions written in 2022 may be dangerously out of date in 2026 — exchanges have changed, hardware wallets have been replaced, trust accounts have been established, advisors have changed firms. An outdated letter can actively mislead your heirs by pointing them to closed accounts or wrong contacts.
Trigger Events That Require Immediate Updates
- Opening or closing any exchange account
- Purchasing a new hardware wallet or replacing an existing one
- Changing your seed phrase backup location
- Setting up or modifying a multi-signature arrangement
- Establishing a new trust, LLC, or entity that holds Bitcoin
- Changing your estate planning attorney, CPA, or other advisor
- Moving to a new home (storage locations change)
- Any major change in your overall estate plan
Annual Review Protocol
At minimum, review and re-date your letter of instructions once per year — and sign or initial each page to confirm currency — even if no changes are needed. This confirms to your executor that the letter is current as of its most recent date, and it gives you the discipline to catch any changes you may have missed. Many Bitcoin holders tie this review to their annual tax preparation meeting with their CPA — a natural checkpoint when financial records are already being reviewed.
The Seed Phrase Companion Document: A Separate, Secure Parallel System
The letter of instructions references where your seed phrase is stored — but your seed phrase itself requires a completely separate security system. These two documents are companions: the letter is the map, and the seed phrase document is the treasure.
Seed Phrase Storage Best Practices
- Stainless steel backup plates: Products like Cryptosteel or Bilodeau store seed phrase words on stainless steel plates that survive fire, flood, and physical damage. Far more durable than paper.
- Sealed tamper-evident envelopes: A paper seed phrase in a tamper-evident envelope inside a fireproof safe. The executor can verify the envelope has not been opened; you can verify its integrity at each annual review.
- Split storage: Some practitioners split the seed phrase between two secure locations — words 1-12 in one location, words 13-24 in another. Both are needed to restore the wallet. Reference both locations in the letter of instructions.
- Attorney escrow: Sealing the seed phrase in a double-sealed envelope held by the estate planning attorney, with a cover letter explaining what it is and when to open it. The attorney does not need to know the contents.
- Never digital for raw seed phrases: Do not store a raw seed phrase in any digital form — not in a Notes app, not in email, not in cloud storage, not in a password manager. The seed phrase is bearer property; digital storage exposes it to breach.
The Passphrase (25th Word) Requires Special Handling
Many security-conscious Bitcoin holders add a passphrase (a 25th word, sometimes called a "secret passphrase" or BIP39 passphrase) to their wallet. This passphrase, combined with the 24-word seed phrase, generates a completely different set of wallet addresses. Without the passphrase, the 24-word seed phrase restores a wallet with zero balance in the passphrase-protected addresses.
The passphrase must be stored separately from the seed phrase — but both must ultimately be accessible to your executor. Common approaches: store the seed phrase with your attorney and the passphrase in a home safe; or use a split-storage approach where different trusted people hold the different components.
Your letter of instructions must make absolutely clear: (1) that a passphrase exists, (2) that the seed phrase alone will appear to show zero balance, and (3) where the passphrase is stored. Failing to communicate this is one of the most common causes of "lost" Bitcoin that is actually recoverable.
Digital Tools for Estate Succession
For Bitcoin holders who prefer digital tools, several options exist for structuring a digital estate plan that integrates with the letter of instructions:
Password Managers with Emergency Access
Password managers like 1Password and Bitwarden offer emergency access features that allow a designated contact to request access after a waiting period. 1Password's Emergency Kit and Bitwarden's Emergency Access feature can be configured so your executor can gain access to account credentials (exchange logins, 2FA backup codes, etc.) after a time delay — giving you time to deny access if the request is unauthorized while ensuring access is eventually available to the right person.
Note: password managers are appropriate for exchange credentials and 2FA codes — they are not appropriate for raw Bitcoin seed phrases, which should always be stored offline.
Dedicated Digital Legacy Services
Services like Everplans, Safe Beyond, and similar digital legacy platforms provide structured frameworks for documenting estate information and designating who receives access. These can complement your letter of instructions for organizing account credentials, though the same rule applies: seed phrases should be stored offline, not in any digital platform.
Encrypted USB Drive with Executor
An encrypted USB drive (BitLocker, VeraCrypt, or similar) containing a digital version of the letter of instructions and non-sensitive account information can be held by your executor. The decryption password is stored separately — perhaps with your estate planning attorney. This provides a digital backup that your executor can access without relying on cloud services.
Integrating the Letter with Your Estate Plan
The letter of instructions is most powerful when it is formally integrated into your overall estate plan — not treated as a separate document created in isolation.
Reference the Letter in Your Will and Trust
Your will and trust should include a reference to the letter of instructions: "I have prepared a letter of instructions regarding the location and administration of my digital assets, including Bitcoin. My executor is directed to locate and follow the practical guidance in that letter to facilitate the administration of my estate." This signals to the executor that the letter exists and should be sought.
Coordinate with Your Attorney Annually
Your estate planning attorney should receive an updated copy of your letter of instructions at least annually. Many attorneys now include digital asset guidance review as part of their annual estate plan check-in service. At each update, confirm: the attorney still holds the most recent version, all referenced contact information is current, and any changes to Bitcoin custody have been reflected in both the letter and the estate plan documents.
The Letter as Evidence of Intent
In the event of any dispute over Bitcoin in the estate, a detailed, regularly updated letter of instructions serves as evidence that the Bitcoin was known, accounted for, and intended to be part of the estate. This can be particularly important in cases where Bitcoin is held in cold storage and was not visible in any account statements that would otherwise appear in the estate inventory.
Letter of Instructions for Incapacity, Not Just Death
Many Bitcoin holders think of the letter of instructions as a document for after death. But incapacity — a stroke, accident, dementia, or extended hospitalization — creates the same access problem during your lifetime. Your healthcare proxy and financial power of attorney holder need the same guidance your executor would need.
Consider adding a separate section to your letter of instructions headed "In Case of Incapacity" that:
- Identifies who holds your financial power of attorney
- Confirms that the power of attorney explicitly authorizes digital asset management (many older POA documents do not)
- Lists the same Bitcoin holdings and access information as the death section
- Specifies whether any Bitcoin management decisions require consultation with a co-agent or family member
Wyoming, along with many other states, has updated its Uniform Power of Attorney Act to explicitly include digital assets. Verify that your financial power of attorney is current and grants the necessary authority over Bitcoin. If it was drafted before 2020, it may need to be updated to specifically authorize digital asset management.
For comprehensive Bitcoin estate planning, see our guides on Bitcoin estate planning overview, how to put Bitcoin in a trust, Bitcoin cold storage estate planning, how to choose a Bitcoin trustee, Bitcoin inherited IRA rules, and inheriting Bitcoin: the first 30 days.
This guide is updated regularly to reflect changes in exchange policies, hardware wallet technology, digital legacy platforms, and estate administration best practices for Bitcoin holders. It reflects practices as of March 2026. This is not legal advice — your letter of instructions should be created in coordination with a qualified estate planning attorney who understands digital assets. The attorney can integrate the letter with your will, trust, and power of attorney to ensure all documents are mutually consistent and legally effective.
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