Answered by Shaykh Abu Usamah
What if someone passed away and from what one knew they were “So-So” Muslims but engaged in some haram stuff. Then upon giving condolences to the family to make them feel better one really embellished the truth about how good a person they may have been. Is this considered lying or is it OK because it makes the family feel better (in addition to the Islamic stuff, of course)?

In the name of Allah, Most Compassionate, Most Merciful,
“Keep to forgiveness, enjoin excellence, and turn away from the ignorant.”
[Qur’an, 7.199]
A Muslim always entertains good thoughts about others. The person who passed away might have well made tawba (repentance) before his death. We are only aware of the apparent condition. There may have been such qualities within him on account of which Allah Ta`ala forgave him. It is not for us to judge. We have hope that Allah has forgiven his sins and has entered him into His mercy.
Allah Ta`ala Knows Best.
Abu Usamah