How to Set Up Bitcoin Inheritance Planning with Liana Wallet Timelocks

Your Bitcoin doesn't care about your will. Unlike a bank account that freezes upon death notification, Bitcoin sits in cryptographic limbo, accessible only to whoever holds the private keys. For the estimated millions of Bitcoin already lost to deceased holders who took their seed phrases to the grave, this is a permanent problem.

Liana Wallet offers a different approach: trustless inheritance enforced by the Bitcoin network itself, no lawyers or custodians required. Using on-chain timelocks, you can configure recovery keys that activate only after your wallet goes inactive for a specified period. Your heirs gain access to your Bitcoin without you having to trust anyone with your keys while you're alive.

Here's how to set it up properly.

How Liana's Timelock Inheritance Works

The core concept is elegant: your wallet has two types of keys. A primary key handles everyday transactions. A recovery key (held by your heirs or a trusted party) remains dormant and unusable until the wallet has been inactive for a predetermined period, up to approximately 15 months.

Critically, this isn't a calendar-based countdown. The timelock measures blockchain time from your last transaction. If you move funds or refresh your UTXOs, the clock resets. If you die or become incapacitated and stop transacting, the recovery key eventually activates.

Once activated, the recovery key remains usable indefinitely until a primary key signs any transaction, which resets the timelock. This creates a simple logic: if you're alive and active, your heirs can't touch your Bitcoin. If you're not, they can.

Step 1: Download and Install Liana

Liana runs on Windows, macOS, and Linux. Download it from the official Wizardsardine website and verify the installation file before running it.

The wallet requires connection to a Bitcoin node. You have two options:

• Run your own Bitcoin Core node: Better privacy and full verification, but requires technical setup and disk space
• Use Liana Connect: A hosted service that's simpler but involves trusting Wizardsardine's infrastructure

For inheritance planning, running your own node is preferable since it ensures your wallet remains functional even if the hosted service ever disappears. However, Liana Connect works fine for getting started.

Step 2: Configure Your Wallet with Inheritance Keys

When creating a new wallet, Liana walks you through its inheritance template. The standard setup includes:

• Primary key: Your daily-use key, ideally secured on a hardware wallet like BitBox02
• Recovery key: Held by your heir(s), also on hardware devices

You'll select your timelock period. Most users choose 12-15 months, which balances two concerns: long enough that you won't accidentally trigger heir access if you simply go on vacation, short enough that your heirs won't wait years after your death.

Advanced Configurations

Liana supports more sophisticated setups using Miniscript, Bitcoin's policy language:

• Multiple recovery paths: A spouse's key activates after 6 months; a broader family multisig activates after 12 months
• Multisig requirements: Require 2-of-3 heirs to sign, preventing any single heir from absconding with funds
• Escalating access: A trusted friend can help your spouse recover after 6 months, but your spouse alone can recover after 18 months

These configurations add complexity but solve real family dynamics. Consider what happens if one heir dies before you, or if relationships change.

Step 3: Distribute Recovery Keys to Heirs

Your heirs need their own hardware signing devices containing the recovery key. They should store these securely, understanding that:

1. The device is useless while you're alive and active
2. After the timelock expires, they simply plug the device into a computer running Liana
3. No special technical expertise is required for recovery

Document this in writing. Your heirs need to know that Liana exists, where to download it, and approximately when to expect the timelock to expire. This documentation can accompany your traditional estate planning materials without compromising security, since having instructions without the hardware device grants no access.

Step 4: Set a UTXO Refresh Schedule

This is the part that requires ongoing attention. Every 12-15 months (depending on your timelock setting), you must move your Bitcoin to reset the timelock. If you forget, your heirs' recovery keys become active while you're still alive.

The refresh process is simple: send your Bitcoin to yourself. This creates a new transaction, resetting the timelock on your UTXOs. Some users set calendar reminders 2-3 months before their timelock expires.

This requirement is the main ongoing maintenance burden of timelock-based inheritance. If you become incapacitated but not deceased, the system works as designed, activating heir access. But if you simply forget to refresh, you've created an unnecessary security risk.

Step 5: Test the Recovery Process

Before funding the wallet with significant amounts, test the entire inheritance workflow:

1. Create the wallet with a small amount of Bitcoin
2. Wait for the timelock to expire (you can use a shorter period for testing)
3. Have your heir attempt recovery using their device
4. Verify they can successfully move the funds

This test confirms your heir understands the process and that all hardware and software works correctly. It also surfaces any practical obstacles, like a heir who doesn't actually know how to install software or connect a hardware wallet.

Trade-offs to Understand

Timelock inheritance isn't perfect. A March 2026 analysis in Bitcoin Magazine noted that on-chain timelocks provide greater durability than off-chain collaborative solutions because the recovery path survives provider failure. If Wizardsardine disappears, your wallet still works since the timelocks are enforced by Bitcoin itself.

However, community discussions have raised practical concerns. Heirs must store signed transactions offline for far-future timelocks because Bitcoin mempools reject transactions locked too far ahead. This isn't fundamentally different from storing a seed phrase, but it's a nuance worth understanding.

The UTXO refresh requirement also creates operational risk. You're committing to active management for the rest of your life. For some, this is acceptable. For others, especially those who might face cognitive decline, it's a real concern.

Integrating with Traditional Estate Planning

Liana's inheritance setup works independently of or alongside wills and trusts. A sensible approach:

• Legal documents: Express your intent for Bitcoin distribution
• Liana configuration: Enforce on-chain access conditions
• Separate documentation: Instructions for heirs on using Liana, stored with estate materials

This separation means your lawyer doesn't need your keys, and your keys don't depend on legal processes completing. Your heirs receive both legal clarity about your wishes and technical ability to execute them.

Getting Started

For those ready to implement timelock inheritance, the Liana Box Starter Pack (a partnership between CryptoSteel and Wizardsardine announced in February 2025) bundles hardware components with setup instructions specifically designed for inheritance planning.

Alternatively, any compatible hardware wallet works. The critical elements are:

1. Your primary key on hardware you control
2. Recovery keys on hardware your heirs control
3. A timelock period that matches your transaction frequency
4. A reliable system for UTXO refreshes
5. Clear documentation for your heirs

Bitcoin inheritance planning with timelocks isn't set-and-forget. It requires annual maintenance and deliberate communication with your heirs. But for those who want inheritance that doesn't depend on third parties, institutions, or legal processes, it's the most robust option available today.