How to securely and privately pass your Bitcoin and digital assets to your non-technical heirs
Passing on Bitcoin and digital assets to the next generation is more than just handing over a secret—it’s a careful process that blends technical custody with real-world legal title. As the creator of the 21sats Inheritance Protocol (a self-custody solution), this blog explores the differences among Self-Custody, Collaborative Custody, and Full Custody approaches. Each solution offers unique advantages and tradeoffs for generational wealth: Self-custody prioritizes individual control and privacy, collaborative custody adds convenience and shared oversight—though with inherent privacy compromises—and full custody shifts complete control to a regulated provider, simplifying inheritance at the cost of absolute trust and exposure to the risks of centralization and regulatory scrutiny.
Inheritance Planning: Custody vs. Legal Title
Custody: Custody refers to the secrets management of digital assets such as private keys and wallet metadata. It is generally software- or platform-based (including Software as a Service), and is largely location independent. Custody is mostly concerned with the technical safety, recoverability, and privacy of Bitcoin private keys and associated metadata. Importantly, robust custody should also encompass other digital assets including other cryptocurrencies, stablecoins, bank account credentials, exchange account details, storage encryption keys, two-factor authentication codes, phone PINs, computer passwords, password manager master passwords, and much more.
Legal Title: Local laws decide who is legally entitled to those assets. Common law systems (U.K., U.S., Canada) rely on wills and probate, while civil law countries (Germany, Sweden, most of Europe) use notaries and state regulations—so estate planning and documentation need to be tailored to jurisdiction. If Legal Title is not handled correctly, your Bitcoin balances, transaction history and other private information are subject to exposure within your country’s public records. This should be avoided at all costs as it presents a serious security threat.
Comparing Self-Custody, Collaborative Custody, and Full Custody Solutions
When planning digital asset inheritance for generational wealth, it’s essential to understand the spectrum of custody options. Most solutions fall into three main categories: Self-Custody—where individuals retain exclusive control over all keys and secrets; Collaborative Custody—where a trusted company serves as cosigner and assists heirs in asset recovery; and Full Custody—where a regulated custodian takes full responsibility for asset management and inheritance. Collaborative Custody solutions typically use a mobile app for setup convenience. All such solutions require that at least one private key be held by the company, which means the provider can continually view your Bitcoin balance and transaction history for as long as you use their service.
Security and Privacy
21sats Inheritance Protocol (Self-Custody Solution)
User has full control: Full self-custody, 100% offline, always encrypted. All keys remain in your control and entirely offline at all times. The security model uses encryption everywhere, both on the hardware wallet side and within backups. The security model strictly follows Bitcoin’s ethos: keys and backups remain offline. The security model is improved by further encrypting backups, and allowing for optional sharding of backups, similar to a multisig. Sharding provides another layer of protection against wrench attacks or natural disasters.
Privacy by design: No providers ever holds any of your keys, no one has access to your Bitcoin balances, past or future transaction history. No exposure to insider threats or hacks, no external access to sensitive financial data, and no ability of a subpoena to gain access. Only you (and anyone you designate) remain in control of your keys and your encrypted backups.
Self sovereign software and hardware tools: utilizing Superbacked software for encrypted messaging and secure backups running on air gapped hardware, 21sats makes it nearly impossible for adversaries or centralized platforms to compromise sensitive data. Superbacked works by encrypting sensitive secret data—such as private keys, credentials, and other secret information—onto encrypted QR codes, and then distributing those encrypted backups across multiple secure locations, including geographically separated safety deposit vaults, solicitor safes with attorney-client privilege, and other secure locations. Each user decides for themselves, based on the 21sats security model. Multiple jurisdictions can be utilized without needing to trust any one location, as all data has been encrypted. Backups are engineered to remain entirely offline and are built to last for over 100 years, dramatically exceeding the typical 7-10 year lifespan of most hardware wallets.
Collaborative Custody (Unchained, Casa, Nunchuk)
App convenience: Providers like Unchained and Casa hold one key (usually stored online on one or more servers), enabling emergency recovery for heirs—but this gives providers visibility into wallets and transactions.
Privacy tradeoffs: Though most Collaborative Custody services advertise “no KYC,” most log IP addresses, device info, and keep detailed server logs about user activity. This can be seen in independent app privacy reports that show which SDKs are embedded inside the app. The risk becomes that a bad actor could purchase tracking data about your phone with ad tech or analytics partners, risking unwanted exposure.
Legal Terms of Service: Below is word for word Terms of Service for a popular Collaborative Custody provider:
“COMPANY” reserves the right to access, read, preserve, and disclose any information as reasonably necessary to comply with any applicable law, regulation, legal process, or governmental request. This includes serving law enforcement requests.
It’s the authors opinion that all of the above companies are good Bitcoin actors. However similar to how Proton Mail has caved to foreign government requests to gather journalists email account details, it’s clear that these company’s are giving themselves legal clearance to hand over their customer data to subpoena and other such requests in the future.
App risks: Reliance on centralized app stores (Apple, Google) can lead to tracking, forced updates, or even app removal, affecting accessibility and security.
Full Custody Solutions
Third-party management: Assets are held entirely by a specialized custodian (such as Trident or institutional solutions), who manages keys and participates in the inheritance process. The provider typically implements legal, tax, and compliance protocols for heirs.
Control and privacy: Owners relinquish key management; custodians control direct access. Without explicit legal structuring (e.g., beneficiary designations, trusts), assets may go through probate, and balances or transaction history can become public record—introducing privacy and security risks.
Convenience vs. risk: Easier for non-technical heirs, but increased centralization and exposure to regulatory, legal, and insider threats. You hand over all trust—including private keys, Bitcoin balances, and both past and future transaction history—to the custodian.
Lack of Privacy:
Collaborative and Full Custody Drawbacks
Transaction visibility: Providers know Bitcoin balances, transaction history, and withdrawal destinations, undermining asset confidentiality. Includes all past and future transactions forever.
Personal data exposure: Most state they are non KYC, but track identifying meta data in the app SDK, potentially linking identity to Bitcoin transactions.
Risk of breaches: Financial and personal info could be compromised by hacks or insiders.
Device and location tracking: Apps track user devices and locations; central app stores increase censorship risk.
Data sharing: Some platforms share user data with third parties for marketing and analytics without explicit consent, weakening privacy resilience.
| Solution | Security Model | Supported Assets | Services Included | Setup Fee | Yearly Cost | Lifetime Est. Cost (ex age 45-85) | Privacy |
| 21sats Inheritance Protocol | Full self-custody, 100% offline, always encrypted | Bitcoin, all other cryptocurrencies, all stablecoins, all other forms of digital assets including account credentials, 2FA, encryption keys, PINs, master passwords, location data and more | White glove service including 10+ video sessions, full inheritance planning, encrypted backups, secure sharding, multi-asset support, heir recovery training, yearly check-ins, lifetime support for you and heirs | $2100 + Equipment costs | $0 | $2100 + Equipment costs | 100% Private. Self sovereign. Non KYC. Only you and your heirs know what you hold at all times |
| Unchained Standard (1 wallet, 2 of 3 multisig) | Collaborative Custody | BTC, others | Concierge onboarding, multisig custody, guided recovery | $250 + $895 Concierge + Equipment Cost | $250 | $12,045 | Private key held with custodian. Wallet balances, all previous and future transactions known |
| Unchained Premium (1 wallet, 3 of 5 multisig) | Collaborative Custody | BTC, others | White glove setup, account management, inheritance services, reduced trading fees, 24/7 emergency support | $6000 | $6000 | $246,000 | Private key held with custodian. Wallet balances, all previous and future transactions known |
| Casa Standard (1 wallet, 2 of 3 multisig) | Collaborative Custody | BTC, ETH, USDT, USDC | Guided replacement for lost or stolen keys, inheritance, email support | $252 + Equipment cost | $252 | $10,332 + equipment cost | Private key held with custodian. Wallet balances, all previous and future transactions known |
| Casa Premium (1 wallet, 3 of 5 multisig) | Collaborative Custody | BTC, ETH, USDT | Mobile app, multisig vault, inheritance support, emergency access | $2100 annual fee. Equipment included | $2100 | $84,000 | Private key held with custodian. Wallet balances, all previous and future transactions known |
| Nunchuk Standard (Iron Hand, 1 wallet, 2 of 3 multisig) | Collaborative Custody | Bitcoin | Wallet + wallet backup to cloud. No inheritance. Email support | $120 + equipment costs | $120 | $4,920 + equipment costs | Private key held with custodian. Wallet balances, all previous and future transactions known |
| Nunchuk Premium (Honeybadger, 1 wallet, 2 of 4 multisig) | Collaborative Custody | Bitcoin | Assisted multisig, email/chat support, inheritance flows | $480 annual fee + equipment costs | $480 | $19,200 + equipment costs | Private key held with custodian. Wallet balances, all previous and future transactions known |
| Full Custody (Coinbase, Gemini, Anchorage) | Third-party holds all keys | Broad (BTC, ETH, stablecoins, etc.) | Legal/tax services, delegated management, regulatory compliance, optional insurance | $5,000 – 10,000 per account | 0.5 – 1% of Assets Under Management (AUM) | Depends on size of your stack, the most expensive of all options | Custodian controls all private keys and wallets, knows all data; privacy rights may depend on legal structuring |
Estimated Lifetime costs calculated for a 40-year time horizon (ex starting at age 45 to age 85)
Comparing Pricing
Cost for services vary greatly
Most collaborative custody services also impose a penalty on heirs upon withdrawal if the service premiums are not current; this penalty can be a significant percentage of assets under management (AUM), making ongoing payment crucial to avoid costly recovery or exit fees.
By contrast, collaborative custody total 40-year costs are $12,045 | 0,11 BTC | 0.11 BTC (Unchained Standard), $246,000 | 2,17 BTC | 2.17 BTC (Unchained Premium), $84,000 | 0,74 BTC | 0.76 BTC (Casa Premium), and $19,200 | 0,17 BTC | 0.17 BTC (Nunchuk Honeybadger), respectively, with higher tiers further accelerating expense. Full custody services, designed for clients seeking institutional-level oversight, combine high upfront fees ($5,000 | 0,04 BTC | 0.04 BTC–$10,000 | 0,09 BTC | 0.09 BTC per account) with ongoing charges of 0.5–1% of assets annually, leading to the steepest total costs and reduced privacy.
A distinctive advantage of 21sats is its support for unlimited wallets, broad family coverage, and holistic digital asset support—including all cryptocurrencies, stablecoins, banking credentials, encryption keys, 2FA, PINs, passwords, location data, and more. Other providers restrict each plan to a single wallet and a narrow selection of coins, missing broader asset support, inheritance training, or household coverage.
Opportunity Cost Analysis
Spending tens or hundreds of thousands in fees on collaborative or full custody plans means diverting substantial capital away from Bitcoin or other investments that could grow for decades. The larger the annual and lifetime outflows, the less inheritance remains to appreciate with market gains or compounding interest. Self-custody’s lower all-in cost results in higher retained wealth and optimal opportunity for asset growth—especially important when planning for generational transfers.
Final Thoughts
Choosing the right inheritance solution is about balancing security, privacy, cost, and simplicity for your heirs.
Self-custody solutions like the 21sats Inheritance Protocol insure the highest level of privacy, maintain true asset self-sovereignty, while minimize exposure to third parties. Your keys and backups remain encrypted and offline at all times. However the setup process for self-custody solutions like 21sats is longer and requires more upfront work compared to Collaborative Custody solutions.
Collaborative custody inheritance solutions like Unchained, Casa.io, and Nunchuk offer a familiar app experience, quicker setup, and convenient online backups. However, these solutions require the provider to hold one of your private keys, which allows them to know your balances, transaction history, all future transactions, and exposes sensitive data to potential legal requests and subpoenas. Moreover, collaborative custody lifetime costs are significantly higher than self-custody models.
Full Custody solutions centralize management and offer a simplified legal title transfer, and no requirements on heirs for key management. However they introduce new risks around centralization, regulatory exposure, and the possibility of your family’s generational wealth being exposed to public records. The costs of Full Custody solutions are often the highest.
No matter the solution, combining technical custody with proper legal documentation ensures a seamless transfer of generational wealth—privately, securely, and with true respect for the values of Bitcoin.
We encourage anyone with additional questions to book a free call with one of our Educators at Bitcoin Citadel.
More Information
www.bitcoincitadel.net/services
www.21sats.org
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