No, it is not a valid way to avoid being sued. Chances are, the celebrity will recognize themselves and they are well within their rights to bring legal action if you are using the image without permission.
Nope. Upon death, the rights are retained by the family or estate.
Many get permission, many don't. But any brand selling nation wide has the money to afford proper legal representation. So they either negotiate a license or are prepared to defend themselves in court. In some cases, like Shepard Fairey or T-shirt Hell, getting sued has made them more popular. Not exactly a business model I would recommend, but it does happen in some situations. The key to it all is having the financial backing to take the risk.
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