Question: Is it legit for Muslims to put the Ayatul Kursi inside the door entrance of the house as a form of protection?
Answer: Yes.
Question: When a family member passes away, is it a Biddah to have a family gathering to read/complete the quran (split up the surahs among the people) for that persons betterness?
Answer: There is no harm in that, and the dead will benefit from it in shaa' Allah. However, one must make sure that every person reading knows how to read properly so that curses will not descend instead of blessings.