Elif, I agree with Attalus for the most part.
I always had the impression that dysfunctional families were ones where things just don't work the way they 'should' such as one parent is missing, or abusive.
Alcoholic or drug addicted parents or kids, one or both parents off doing their own thing, leaving children with no support or worse... kids that get into trouble on purpose for attention they miss at home, or join gangs etc for the 'family' they don't have at home... I think there are a hundred variations on the theme, but that's the general idea. I think you could even stretch it to say if a grandparent interferes it's 'dysfunctional' these days.. mainly because of what Attalus said- certain 'roles' are assumed in a family unit, traditionally.
Doesn't sound like the person who said that to you really gets the idea. A family that supports and HELPS one another is pretty fantastic, in my book.
Sorry to hear about your dad and all that mess! I always hate when families are torn up over material goods when someone dies... it feels so awful to me.
I agree with you- having the loved one is far better than having their belongings.