It's kind of hard to social engineer dead people, though.

This is why the "normally" in my sentence. But the point I really wanted to make is that you have no "impossible" with encryption.

dead people were once alive. go through their pockets or their apartment.

You can go through each and every physical object I own or even was in contact with, but you won't find any of my passwords

What happens to all your stuff when you die?

I guess my family will take care of my physical stuff. For the online part, some of it can probably be handled through support (facebook, etc...), and the rest will stay as is until it is deleted for lack of use. Or never deleted. Both are okay.

Leaving a physical trace of my passwords is not only bad practice from security point of view, but quite useless since I know them. Also, my online accounts are useless if I can't use them because I'm dead, so I don't really care if no one can access them anymore. What happens to important things such as banking is already dealt with.

I just got a Facebook birthday notification for my cousin, who died three years ago. So, that has some impact on me and others in our extended family. Maybe that's ok, maybe it'll get weirder at some point; but its definitely something to think about.

You can have FB set the page as a memorial, and I believe that also gives you the option to disable all those types of notifications.

That's a very real issue indeed. Sorry for your loss.

But I think the right solution here would be for Facebook to have a way of handling deceased people, not giving your password to everyone in case of sudden death.

They do. If someone contacts Facebook and let's them know that a person has died (with some sort of verification), they will memorialize the account.

https://www.facebook.com/help/103897939701143

If facebook doesn't want to delete his account, why don't you unfriend him?

You can have the account memorialized (and/or removed): https://www.facebook.com/help/150486848354038

Would you?

Watch this https://archive.org/details/Online_No_One_Knows_Youre_Dead

Why care about "stuff" once you are dead?

Because you don't want to make a difficult situation even harder for your relatives?

See, for example, the people who know they're going to die and who leave their iPads to their relatives in their wills. Apple doesn't take grants of probate as sufficient legal documents (everyone else does (eg banks)) and insist on a court order.

http://www.bbc.co.uk/news/technology-26448158

Significant other? Kids? Relatives?

From a forensics point of view that is a very risky path. You risk destroying the evidence and you're tampering with it.