Some people don't want all of their friends and family to be notified when they die... so while your transparency idea sounds good in THEORY, I fundamentally disagree with it. Ditto for your appeal process idea. Some people prefer to fade away in silence with dignity (from their point of view).

That said, both of your ideas have merit if they are proposed to users as available OPTIONS that can be manually activated/opted into, but I would hope they never make them the default behavior. Losing someone close is hard enough without turning it into some democratic voting catastrophe.

I believe the legacy contact system is far and away superior to any mess like democratic voting by social peers. It's specified by the person THEMSELVES, as it is after all their account, their life, and their identity being handled here. For those that don't specify a legacy contact, respect their privacy settings and don't auto-opt them into new features that deactivate previously set privacy settings... I'm looking at you FACEBOOK, just because you launch version 2.0.whatever of the insert-feature-here, that doesn't mean the default setting for all previous versions of that system should flip to PUBLIC "magically".

Fuck Facebook.