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From http://www.meaningfultributes.com/dbID/1547.html

TAO: Beliefs About Death

Taoism places great value on life. It does not focus on life after death, but emphasizes health and longevity by living a life of simplicity and inner peace. Taoism teaches the devotee to lead a long and tranquil life through the elimination of one’s desires and aggressive impulses. The Tao beliefs about the after life have never received much focus, so there are several different views. The early church had an idea of a special post-mortem fate for church members that involved “passing through Grand Darkness to have their images reborn”

Other Taoists believed a utopia would soon be realized – the Great Peace. Much like the Christian Kingdom of God, there is a sense in the early documents that this world transcended life and death so that the living and dead would be reunited there, so long as they had been saved while alive.

Funeral Practices

A Taoist priest officiates at the simple funeral, consisting of a brief eulogy, three prostrations by the attendees, and a farewell message. Traditionally in China, after a three day visitation and funeral service, a Chinese Taoist is buried in a family graveyard. The deceased ancestor then becomes an object of worship by his surviving family members. After being interred for four years, the ancestor’s bones are disinterred, cleaned, placed in a ceramec jar, and re-buried in front of his tombstone.

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Taoist Funerals