There really are no rules. My own practice is
as little as I could get away with -- it's all about clarity. If something isn't clear about the time frame, then I'd use the past perfect to clarify. Otherwise, it's all past tense.
Usually a sentence is good enough to establish it:
Jane had gone out to the store to buy an apple pie. She arrived at the store and looked at the pies, and she saw one that she liked. But she had forgotten her wallet. So she went back to her apartment to fetch it. That was when she went into John. And now, she was dead.
Here, I used only one past perfect tense to indicate that this is all in the past (before the current time line). The rest is understood. I used another past perfect to indicate that it was even before that time line. So there are three time lines: the current one (she's dead), the previous one (she went to the store), and the earliest one (she forgot to bring her wallet).
