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So as long as you dont kick that account from the Steam Family it will continue to share its games with the other members.
So unless you contact Steam Support and tell them (with proof) that a certain family member is deceased and that they should remove them from the family absolutely nothing will happen.
I'm not dying yet, but someday I will. I have kids and I expect them to be able to atleast retain the possibility of maintaing their game stats etc. And about the proof and stuff - I imagine a hilarious situation in the future when Valve realizes that they have a lot of accounts which are very active and over 100 years old...
My personal solution to this is, should I ever know I'm about to kick the bucket, I'll disable Steam guard and send my sister (10 years younger than me) the account name & PW. And should I die without expecting (let's say in an accident) then I won't be around anymore to feel disappointment about my games going to waste.
My personal suggestion to solve this would be to compile a book of credentials containing EVERYTHING they'd need to recover your account(s) and hand them to your attorney as part of you will.
There may be others (and better) ways to deal with this topic. People have been discussing this for years, including suggesting solutions. I suggest you check out all the existing talk about this.
It's like they're asking if It's ok do violate a contract...
I might have been waving my Jolly Roger once or twice (more like ALOT of times)... but I don't make a big thing out of It...
Just don't make a thing Out of it...
Contrary to popular belief, Valve are not monsters. In the event a loved one dies, as long as you have the required information, Valve will help you recover an account should you need to. In other words, even if the family member passes away, as long as you can still access the account, it will remain available for family sharing.
While I don't speak with experience in regards to family sharing, I do speak with experience in regards to recovering my father's account when he passed away a few years ago.
So, if Steam is still a thing in the event of your passing, just make sure next of kin have the information needed to access your account. Valve won't care unless you're trying to sell it to someone else.
The EULA says no, the account is absolutely not transferable. However, the question of whether digital assets can be considered property that can be inherited is still a grey area, and no such case has been tested in court.
Perhaps your intended beneficiary can become the first Polish test case. ;)
My guess is, as the amount of Steam accts. grows and suddenly millions of people will realize that they have libraries filled with thousands of games they paid real money for, and they can't pass those on - laws will be written.
Oh and anyone defending Valve at this point is pretty much saying "Yeah, I love how this benevolent corporation will make my kids pay for the games again."