I only make the distinction because, throughout this 50th anniversary year, I have often had to remind myself to use "commemoration" rather than "celebration" - I've been pulled up a couple of times on the concept of celebrating someone's death!

In this context I understand "celebrating" to mean celebrating their life not their death so either word seems OK to me.

When my Mother died we held a quiet funeral immediately and my Father later arranged a service in his local church to celebrate her life. I was able to attend the former but not the latter so it was quite a good arrangement.