I would divide my 24 words into groups of 16 like this:
Party 1: words 1-16
Party 2: words 9-24
Party 3: word 1-8 and 17-24
Or groups of 8 for a 12 word phrase.
Boom. 2 of 3 recovery plan.
Discussion
If someone has 16/24 of your words, or 8/12 of your words, your seed could (fairly) easily be brute forced.
Also, if you have 2/2 multisig, wouldn’t you have 48 words, or two sets of 24?
In which case I suppose you could distribute those words across multiple 3rd parties the same way you did here, but you be subject to the risk of
1. Someone losing their set making your coins impossible to access
2. Two of the holders colluding and putting the words together to steal your coins
If you’re really set on having a third party help you with multisig, why not use a company like Unchained? Make a 2/3 multisig setup where you have a HW wallet, a Hot wallet, and they have the third key in their custody product? It has trade offs too, but at least it would be a professionally managed solution which fits your wallet needs and isn’t overly complicated.
Damn hadn't thought about brute force either. I definitely don't want to be brute forced, so I will not divide my seed in that way.
The reason for having family members do it is because I trust them enough not to collude. I am close enough with them that I know they wouldn't try to screw me like that. If I ever have doubts in the future I can just move my stash.
I'll look into unchained, but I would like to "keep it in the family" if I can. It's not only a recovery plan, but also a way for them to recover my coins if something were to happen to me. I'm sure unchained has that covered too, but this is also a good way for me to teach them something about Bitcoin.
My plan is to provide both of them with a sealed will/recovery document containing instructions on how to recover my Bitcoin together if needed. If the document were to get lost or stolen I would immediately move my coins and create a new setup. I will make it clear to them that if something happens to it they will need to let me know right away.
I guess I will do a 2 of 3 and have each of us hold a different key.
You’re doing the right thing by thinking through your security and setup now, rather than later (or god forbid not at all). I also can respect wanting to keep it in the family - I do the same, and I think part of life is learning to trust some of the people you care about with some level of responsibility.
I wish you all the best in your journey and hope you find a good setup which works well for you. There are lots of good resources to help you (podcasts featuring #[5], #[6], #[7] have huge amounts of useful and valuable information) and tools will only continue to improve into the future. Safe stacking! ⚡️
Thank you 🙏