I was raised in a tradition where people do not wear black to funerals. I do think it is a good idea to keep a conservative outfit available to wear in case of a funeral for a business associate of you or your spouse. Also it is important to consider religious faith, or lack of, for the person whose life you are memorializing.
I have seen some flashy outfits worn to funerals here in California. I would never criticize any outfit worn by a family member or close friend--you never know what the outfit really means to the person close to the deceased. The only criteria I suggest is: nothing showing cleavage, nothing too short or too tight. After all, it's not about you--it's about the life of the person who died.