First I am so sorry for your loss. God's Blessings to you.
Second, if it were me, I would have to organize in steps (it is just how my mind works). First, I would separate into large boxes per craft activity. Then I would work on each craft, separating by what I will use the most. Honestly, if you have a basement, or some other storage space, put whatever you are not actively working on out of sight. Then just do as much as you can at any one time. I would not suggest discarding/donating/gifting anything right now. Too soon, wait a while before making any decisions.
My craft room is a 10 x 10 spare bedroom: I have shelving units along one wall for fabrics and sewing supplies. Books and patterns are in shelving units along another wall. A large table has my sewing machine and laptop at a right angle to the third wall, and my embroidery center and TV are located on the fourth wall. Yarn, beadwork, cross stitch supplies and stamp supplies are in rollout carts with drawers/shelves located in the walk in closet. I also have extra supplies stored in the walk in closet in wheeled suitcases. Makes double use of the suitcases!
Hope this helps. Just take it a little at a time!