Jeffrey's anwser covers the business/team side quite well and there isn't much to add to his solid answer, but I would like to provide an answer on a more emotional level towards the deceased and their family.

I can definitely understand (been in a similar situation about 6 years ago) that you have certain sentiments towards that very much liked and valued teammember after 3 years working with him and that you and/or the team feel the need to express those while not being too intrusive. 

Attending the funeral is a bit much and would be seen as intrusive by other family members or close friends who might not even know you or the other team-members, but a personal, handwritten condolence letter from the team to the family would be a reasonable and appreciated reaction:

> \[enter name here\] was a great team member and much valued and appreciated by me as well as many others in the team...

You can mention special qualities of the deceased, recall good memories you have of the person, remind the bereaved of their personal strengths. You could also offer help, but be specific. End with a word or phrase of sympathy for the ones who are left behind mourning.

When I was in this situation 6 years ago, we knew that the deceased left behind a wife, two kids and a half-finished house he was currently building - so besides sending a condolence letter signed by almost the whole company, we started a fundraiser within the company to relief the mother of some of her financial burdens, especially in regard to her pre-school kids and the unfinished house. 

We were able to raise quite a substantial sum and handed it over to the widow. But again - this was a very special case so that might not apply to the situation of the deceased in question