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OK, to be serious... I would split each school in 'Alumni' into 2 sub-categories: 'Classmates' and 'Obituary'.
When a classmate passes away, a relative can log-in and change the category for the listing, or admin (you) can do it. I would just add a small note to 'extra info' to explain cause of death etc.
Unfortunately, there appears to be a couple of small bugs in Alumni 2.3:
1) In user-side editing of the 'extra info' field the original data is not picked up from the database.
2) Although people can be moved into a different category, the listing itself is not updated with the category change, so moving someone from 'classmates' into 'obituary' their listing still shows 'classmates'.
If I can see a fix for that, I'll post it, unless anyone else already has a solution.
-- EDIT --
You may need to add some conditional statements to exclude certain things from showing up in the obituary category, e.g. 'You need to log in to reply to John Smith'.
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