The following post has been written with help from http://www.budsas.org/
Buddhist Funeral Rites
A real Buddhist funeral is a simple, solemn and dignified religious service.
As practised in many Buddhist countries, a real Buddhist funeral is a simple, solemn and dignified ceremony. Unfortunately, some people have included many unnecessary, extraneous items and superstitious practices into the funeral rites. The extraneous items and practices vary according to the traditions and customs of the people. They were introduced in olden days by people who probably could not understand the nature of life, nature of death, and what life would be after death. When such ideas were incorporated into Buddhist practices, people tended to blame Buddhism for expensive funeral rites. If only the Buddhist public would approach proper persons who have studied the real Teachings of the Buddha and Buddhist tradition, they could receive advice on how to perform Buddhist funeral rites. It is most unfortunate that a bad impression has been created that Buddhism encourages people to waste their money and time on unnecessary practices. It must be clearly understood that Buddhism has nothing to do with such debased practices.
Buddhists are not very particular regarding the burial or cremation of a dead body. In many Buddhist countries, cremation is customary. For hygienic and economic reasons, it is advisable to cremate. Today, the population in the world is increasing and if we continue to have dead bodies occupying valuable land, then one day all remaining available land will be occupied by the dead and the living will have no place to live.
There are still some people who object to the cremation of dead bodies. They say that cremation is against god's law, in the same way they have objected to many other things in the past. It will take some time for such people to understand that cremation is much more appropriate and effective than burial.
On the other hand Buddhists do not believe that one day someone will come and awaken the departed persons spirits from their graveyards or the ashes from their urns and decide who should go to heaven and who should go to hell.
The consciousness or mental energy of the departed person has no connection with the body left behind or his skeleton or his ashes. Many people believe that if the deceased is not given a proper burial or if a sanctified tombstone is not placed on the grave, then the soul of the deceased will wander to the four corners of the world and weep and wail and sometimes even return to disturb the relatives. Such a belief cannot be found anywhere in Buddhism.
Buddhists believe that when a person dies, rebirth will take place somewhere else according to his good or bad actions. As long as the person possesses the craving for existence, he must experience rebirth. Only the Arahants, who have gone beyond all passions will have no more rebirths and so after their death, they will attain their final goal Nibbana.