Garner in Modern American Usage (p499) has an excellent entry on this :
late. A. the late. This expression is elliptical for lately (i.e., recently) deceased. How long this can be used of a dead person depends
on how recently that person died, but anything more than five years
or so is going to strike most readers as odd (e.g., the late John F.
Kennedy). Of course, there's no absolute statute of limitations; the
question is whether a fair number of reasonable readers would know or
need to be reminded that the person has died. But the expression
offers more than just a reminder. It also offers a note of respect -
and perhaps even a touch of sorrow. So in the fall of 1997 people
said the late Princess Diana not because anyone needed to be reminded
that she had died in August of that year - everyone knew it - but
because people mourned her death. By the same token, a widowed spouse
might continue to use my late husband or my late wife.
Edit: The above answer has now been added to the original (identical) question at: How long can you say "the late so and so"? .