A disabled bay provided outside somebody�s house as you describe is available for use by any blue badge holder and not exclusively for the disabled person who lives in the house. (In practice, however, it is likely to be used predominantly by that person).
The fact that the person who lived there (and for whom the bay was originally provided) has died does not convert the bay back to normal use, but still reserves it for use by any blue badge holder. If the daughter who visits does not have a blue badge she is committing an offence by parking there.
You should contact your local council to explain the situation and ask that they convert the bay back to normal use.