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.
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.
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.