The Gemara in Masechet Pesachim (3) tells the story of Rabbi Yehoshua, whom the other Rabbis sent to check on Rav Kahana, who had taken ill. Rabbi Yehoshua went and learned that Rav Kahana had passed away. Rather than informing his colleagues of the death of the great sage, Rabbi Yehoshua rent his garments and turned the tear to the other side, where it would not be visible, so as to conceal the news. After the other Rabbis learned that Rav Kahana had passed away, Rabbi Yehoshua explained to them that he did not notify them of the sad news because of the verse, "Motzi Diba Kesil Hu" – "One who bears bad tidings is a fool." He therefore kept the news to himself, rather than divulging the information to his colleagues.
Practically speaking, how should one go about notifying somebody of a relative's death?
Rabbi Pinchasi, in his work "Chayim Va'chesed," writes (listen to audio clip for precise citation) that a person need not rush to inform somebody that his relative has passed away. And so long as the relative is unaware of the death, he may participate in weddings and other celebrations and functions, and others are not required to notify him of his relative's passing. The exception to this rule is that sons should be notified of their parent's passing in order that they can recite Kaddish for the parent and thereby elevate his or her soul. Rabbi Pinchasi adds that clearly one may not falsely report that a relative is living if he or she has died, due to the rule of "Mi'devar Sheker Tirchak" – one may not speak dishonestly.
It is permissible to announce a funeral, so that people will come and pay their respects to the deceased. Our custom, however, is to announce that a "Mitzva" will be taking place, rather than make explicit reference to a funeral.
The Imrei Emet (one of the prominent Rebbes of Ger, 20th century) raises a question concerning the Gemara's interpretation of the verse, "Motzei Diba Kesil Hu." Citing the Ramban (Rabbi Moshe Ben Nachman, Spain-Israel, 1194-1270), the Imrei Emet notes that the Hebrew word "Diba" generally means "falsehood," rather than "bad tidings." Why, then, does the Gemara understand this verse to mean that one is a "fool" if he conveys bad tidings?
The Imrei Emet answers that when a righteous person dies, his period of death is essentially a temporary period of sleep, from which he will awaken at the time of Techiyat Ha'metim (the resurrection). Therefore, to say about a righteous person – such as Rav Kahana – that he "died" indeed constitutes "Diba" – falsehood, and for this reason one who openly reports the "death" of a virtuous person is deemed a "fool."
Summary: One need not inform a person of his relative's passing, and he may withhold the information to allow the relative to attend a festive function. One may not, however, openly lie. A son should be informed of a parent's death so that he will recite Kaddish.
