She was a really nice professor and she wrote me a good recommendation letter that resulted in a lot of good results with applications. Recently, this professor died from brain cancer, which was a fast and shocking death for me.
Tomorrow is the deadline for a grant. What should I do? Is it professional to use letters from the deceased?
I am in, more or less, your exact situation. My PhD supervisor died of a brain tumor in 2011. However, he did not leave behind a letter for me, nor am I on the market. I think you should be careful of the culture that you are applying in. If the culture demands, usually, that the letter be blind to the applicant, then you should probably not use it unless you state in your cover letter the reason why you have included it. If it's an open system, then you will probably benefit from it unless it's been 5 or 10 years since your recommender's passing. Either way, as the comments say, you should disclose what's going on.