You can find an urn inside a house on the north side of Rice Street, just a little past the white van holding a painting and shotgun. The house's door is illuminated by a faint light. After entering the house, go upstairs and in the bedroom on the left you will find a "Funeral Announcement" note on the bed and an urn on a dresser by the right wall.
After grabbing the urn, exit the house. Follow the road left and go onto the dirt road when you come to it. Follow this road left, then right onto the dock. Go almost to the end and there will be a bench on the left. Use the urn here. After using the urn, a five digit number will appear. Return to the house on Rice St. and upstairs in the opposite bedroom you will find a safe. Enter the number obtained from spreading the ashes and the safe will unlock. After unlocking the safe, you can retrieve your prize of a Colt handgun and some ammunition.