The policy you read about account transfers on death is in the TOS. It's at the end of the section disallowing transfer of accounts; it says that they'll be willing to work with estates in which the will says to give the account to someone on death.
You may not transfer your Account to any third party without the prior written consent of Linden Lab; notwithstanding the foregoing, Linden Lab will not unreasonably withhold consent to the transfer of an Account in good standing by operation of valid written will to a single natural person, provided that proper notice and documentation are delivered as requested by Linden Lab.