How to Set Up a Bitcoin Inheritance Plan Using Liana Wallet

Most Bitcoin inheritance plans fail not because of cryptography, but because of procedure. Your heirs don't need to crack a private key; they need clear instructions, the right files, and enough context to act when you're gone.

Liana Wallet addresses this problem with a timelock-based recovery system. The concept is straightforward: your primary key can spend at any time, but a separate recovery key becomes active only after a period of wallet inactivity. If you stop making transactions for, say, 12 months, your heir's key unlocks spending access.

Here's how to actually set it up.

Understanding the Core Model

Liana uses Bitcoin's native scripting capabilities (specifically Miniscript and CSV timelocks) to encode your spending policy directly on-chain. No third party holds keys. No monthly fees. No custodian to trust or worry about disappearing.

The tradeoff is discipline. You must make at least one transaction before the timelock expires to reset the countdown. Miss that deadline, and your heir's recovery key becomes active while you're still alive.

Liana's official setup guide, updated August 2026, specifies three critical elements:

• Primary spending key: Your everyday key, usually on a hardware wallet
• Recovery key: Held separately (ideally by your heir or in a location they can access)
• Wallet descriptor: A text string encoding your complete spending policy

The descriptor is the part most people underestimate. Without it, the recovery key alone is useless. Your heir cannot recreate your wallet from just a seed phrase; they need the descriptor that defines how those keys interact with the timelock.

Step 1: Choose Your Timelock Duration

Liana measures timelocks in Bitcoin blocks, which average roughly 10 minutes each. The wallet converts this to approximate calendar time during setup.

Third-party guides suggest most users choose between 12 and 15 months, balancing two risks:

• Too short: You might forget to refresh and accidentally activate heir access
• Too long: Your heir waits an extended period after your death before funds unlock

Pick a duration you can reliably remember to refresh. If you're the type who sets calendar reminders and actually follows them, a longer timelock works. If you're forgetful, build in more margin.

Step 2: Configure Keys and Create the Wallet

Liana supports multiple hardware signers, including Ledger, Coldcard, BitBox, and Specter-compatible devices. You can run the software on Windows, macOS, or Linux.

Using Liana's "Simple Inheritance" template:

1. Set up your primary key on your hardware wallet. This is the key you'll use for normal spending.
2. Generate or configure the recovery key on a separate device. This should be stored where your heir can access it (or should be given directly to them).
3. Select your timelock duration in the wallet interface.
4. Generate the wallet, which produces your descriptor.

The descriptor looks like a long string of characters and numbers. It's not secret in the same way a seed phrase is (it doesn't let anyone steal funds without a key), but it's essential for recovery.

Step 3: Back Up Everything

Your backups need to include:

• Seed phrases for every signing key (primary and recovery)
• The wallet descriptor

Liana's documentation is explicit: recovery is not guaranteed without the descriptor. Store these backups separately. Your seed phrase should never live next to your descriptor in the same location.

Consider steel or other durable backup methods for long-term storage. Paper degrades; safety deposit boxes flood; houses burn down.

A Note on Security vs. Accessibility

The tension here is real. The more secure your backup (buried, encrypted, distributed), the harder it is for your heir to actually use it. The more accessible (written plainly in a desk drawer), the higher the theft risk during your lifetime.

Many users split the difference: keep the descriptor accessible but store the recovery seed phrase more securely. Your heir needs both, but having the descriptor alone doesn't compromise funds.

Step 4: Document the Recovery Process

Your heir will need to:

1. Install Liana Wallet on their computer
2. Restore the wallet using your descriptor
3. Connect the recovery signing device
4. Wait for the timelock to mature (if it hasn't already)
5. Sweep funds to a wallet they control

Write this down in plain language. Assume your heir knows nothing about Bitcoin and may be grieving when they need to follow these steps. Include screenshots if you can. Name the specific devices and where they're stored.

This documentation is separate from your will. Probate proceedings can expose details publicly, so many estate planners recommend a private "letter of instruction" that accompanies but isn't part of the legal document.

Step 5: Set Up Your Refresh Reminder

Liana warns you as the timelock deadline approaches, but don't rely solely on software notifications. Set a calendar reminder 2-3 months before expiry.

Refreshing is simple: send any amount of Bitcoin to yourself within the wallet. The transaction resets the timelock countdown. This costs a small transaction fee but ensures the recovery key stays dormant.

If you receive Bitcoin to the wallet through normal use, that also resets the timer. The risk is dormant wallets you've stopped actively using.

Step 6: Test the Recovery Path

Before finalizing your setup, verify that recovery actually works:

1. Create a test wallet with a small amount of Bitcoin
2. Wait for a short timelock to mature (you can set a test wallet to a few days or weeks)
3. Attempt recovery using only the materials your heir would have
4. Confirm you can spend from the recovery key

This catches documentation errors, missing backup components, and assumptions about what your heir will know.

What Liana Doesn't Solve

Liana handles the technical transfer of Bitcoin. It doesn't handle:

• Legal authority: Your heir may need explicit digital-asset authority in your will to avoid disputes with other beneficiaries or complications in probate
• Asset discovery: Your heir needs to know the Bitcoin exists in the first place
• Tax implications: Inheritance triggers tax events in many jurisdictions

Consider working with an estate attorney who understands digital assets, or at minimum, ensure your documentation includes a clear statement that these Bitcoin holdings exist and your designated heir is entitled to them.

Some commentators suggest a hybrid approach for substantial holdings: keep the majority in self-custodial timelock recovery like Liana, but also have clear legal documentation and ideally a Bitcoin-literate executor or advisor who can help your heir navigate the process.

The Honest Tradeoff

Liana's approach is fully self-sovereign. No third party can freeze your funds or lose their encryption keys. But self-sovereignty means self-responsibility. You must:

• Remember to refresh the wallet
• Maintain accessible but secure backups
• Create documentation your heir can actually follow
• Update everything if you change devices or keys

This isn't for everyone. If you're unwilling to maintain a calendar reminder and periodic check-ins with your setup, a timelock-based inheritance system adds risk rather than reducing it.

But if you can maintain that discipline, Liana offers something rare: a way to pass Bitcoin to your heirs without trusting a company, a lawyer, or anyone else to be around and honest decades from now.

Your heir gets your Bitcoin because the protocol says so, not because a third party approved it.