How to acknowledge a deceased advisor’s contributions to a paper?
I had a similar situation. In this case, we did exactly what you did: we indicated that the participant (not a team leader, but a team member in this case) was a co-author, but that he was deceased. I think this is the only fair way to recognize substantial contributions. 

Of course, the difficult comes if there is a challenge to the work of the deceased. In our case, however, we had a very substantial paper trail which was audited and reviewed, so the individual work could have been sorted out and dealt with appropriately. 

So, I think the best defense is generally to keep good working notes and use version control.