Doesn't matter as much what you do or how, but more importantly that you've communicated it to the people who will have to deal with your stuff if you were to kick the bucket tomorrow.

My parents simply made a list of passwords on a piece of paper, buried with the other important papers.

it depends on where the important stuff is.

i have all the family photos on encrypted devices, and the most efficient way to share them is to share the passwords for those devices. my phone they don't need because the important stuff from the phone is backed up anyways, so they just need that backup.

so i guess the easiest way is to keep separate backups of stuff you want to keep private and stuff you want to share.

I have a doc, which is password-protected and shared with my wife. It contains details of bank accounts, how to access shares, who we're insured with and passwords / passcodes for things she might need access to.