What should my brother-in-law do about his Thai retirement visa after returning from a funeral?

As long as he got a Re entry permit before he left all will be fine otherwise his Visa will be cancelled

Check with your brother if he has a multi entry stamp in passport then he has no problem and once he arrives back in Thailand his new 90 days starts the day he arrive back ..

90 days on arrival no problems

He will be ok if he has a multiple entry or he'll have to get a re-entry permit.

I agree with the previous comment, if he got a re-entry permit before leaving and he returns before his retirement visa (extension) expires then he can come back anytime, the 90 day reporting stops when you leave Thailand and a new 90 days starts when you return. If however he didn't get a re-entry permit or his retirement visa expires while he's outside of Thailand then he has to start from scratch.

90 day reports are only for 90 consecutive days in Thailand. If he's not in Thailand, there is no 90 day report. He starts counting again at day 1 when he returns.

Whether he needs to start over again depends on if he purchased a re-entry permit before he left. Without a re-entry permit, his extension would have been cancelled as soon as he left Thailand.

With a re-entry permit, he can re-enter using his existing extension. He would need to be back before that extension expires to apply for his next annual extension.