My heart goes out to your SIL and the entire family. I would think it would be too soon for a memory quilt.
I lost my mother last year, and I had posted her photo on a post here, and I had to ask that it be removed, because everytime I saw it I cried my eyes out and got so depressed. I am sure over time it will heal somewhat, but it would be too soon now to do a memory quilt (this is just my opinion as I have suffered from severe depression all my life and since Mama passed it has gotten worse.)
So be real sensitive to what your SIL is going thru.
My thoughts and prayers are with you and the entire family.