Peter O'Brien said he was so shocked he had to pull over after seeing the word 'T***' written out in flowers.
The white floral wreath was placed in the window of the car and behind the coffin, but according to church leaders it was not brought in to the ceremony.
Peter said he was driving in Dingle, Liverpool, when he noticed the hearse parked outside St Cleopas C Of E Church.
The 45-year-old said he was so shocked he actually stopped his car to take a picture of the tribute, which he spotted on Tuesday.
He told the Liverpool Echo : "I was shocked of course but thought it was brilliant. What a sense of humour.
"I might get one done at my funeral."
Vicar David Gavin, of St Cleopas C of E Church, said: "I didn't take the service but I have phoned the retired minister who took it for me.
"He had no knowledge that it was there. The first I saw of it was when my son showed me the picture on social media.
"I was disappointed to see it parked outside the church."
The vicar said he believed the flowers were screened by the coffin, which is why they were not seen by the minister or anyone involved in the service.
He added: "I don't want to judge the family or their reasons for the tribute.
"What they mean by it I don't know and can't say. But what I can say is that I was disappointed to see the photo."