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Sue the dead?

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Two months after my father died, a woman sued him for slander and a long laundry list of completely false items.  I had signed documents and witnesses to prove every single claim was false, but the estate attorney insisted we pay her off because it would be too costly to take it to court. Even if we won, the courts would not make her pay our legal fees.  We still lose.  It cost us over $40,000 in legal fees just to get to the point of negotiating her payoff price.  

Why shouldn’t she file such a lawsuit?  It costs her nothing at all.  Her lawyer works on commission and takes a percentage.  She cannot be punished in any way.  Her lawyer cannot be punished.  But if I, as the executor of the estate, refused to pay her off and insist on taking it to court, the other heirs can sue me for wasting the assets of the estate.

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