Recovery mechanisms can be implemented as smart contracts. For example, you can set up your wallet so that with Key-A can be used to transfer funds/NFTs freely, but Key-B can only transfer to a specific recovery account. Transfers from the recovery account can either be made with Key-B after a certain amount of time has passed, or immediately with Key-A. You keep Key-A, your family gets Key-B. If something happens to you they can get the assets out after a set time using Key-B. If someone tries to abuse Key-B to take the assets while you're still around you just use Key-A to transfer everything to a different account before the waiting period expires.

The unrecoverable private key is just one implementation of blockchain technology, there are various way to implement a blockchain solution to various use cases.

BTW current centralized solutions to estate planning issues are not exactly that great anyway. it is not unusual for family not to know a will, insurance, pensions, and bank accounts even exist for deceased. Just look at the current unclaimed assets for deceased I think its around $2T.