My sovereign married one of his champions, and after a little adventuring they encountered a critter that ended up killing her before any children were born.
After an out-of-memory crash I reloaded an auto save from after the wife died. In the dynasty screen she was no longer listed as dead, however she no longer existed in the game world. At that point I figured my sovereign would not have any heirs since he could not marry anyone else, however, a few turns later I got a message telling me that a child was born, and a few turns later another one.
Now, I'm not an expert, but should dead people be having babies?