As said above Briony, I'd interpret that as "don't wear traditional funeral black".
You know the family better than anyone else here, so it depends how conservative they are as to whether that means : "dress like you were going out for dinner" / "dress like you were going clubbing" / "smart casual" / or any other permutation of feather boas, leathers etc etc.
If you're unsure, I'd play it safe and go for the out to dinner at a nice restaurant look . . . if you knew them well and think it would have made them smile then go for something a bit more quirky.