Once you decide what to do, I wouldn't return any security to the parents unless they're entitled under the lease. Unfortunately this day in age, you don't know if the parents are divorced/separated/ fighting/might just not be rationally thinking for a while. A monetary refund, if you issue it, would go to the deceased estates. I wouldn't charge rent through the end of the lease for the deceased. I'd just let it go. I would charge the remaining tenant 1/3 of the rent.
As a landlord our job is to make money from our rentals. However, I am also a human and a mother. I personally would allow the remaining student to move out if he wants to and break the lease w/no consequences. I wouldn't contact the deceased students parents. I'd wait 30ish days for them to contact me before I'd think to do anything. But again, the parents have no legal rights to the items in the apartment. You don't want to be "assisting" in the middle of 3 sets of grieving, perhaps nonthinking rationally parents deciding who owned the entertainment center and whose PlayStation. Hopefully, they have a key and can gain access without your assistance.
I'd wait to return the security deposit until everyone & everything is gone and then divy it up proprtionately the way it's set up under the lease and would only give it to the deceased parents w/some type legal disclaimer from who knows who. I probably wuold use my attorney for a final type release form.