Funeral directors must keep all cremated remains indefinitely, with many dating as far back as the 1930s.
Adrian Nelson, of Nelson Bros Funeral Services, said he would like to see a national register of unclaimed ashes so descendants could collect long-lost relatives.
He said ashes that were not claimed after a certain period should be given a dignified farewell, such as scattering in a memorial garden.
“These days we are very diligent about ensuring family members get the ashes of their loved ones, but in the past this wasn’t always the case,” Mr Nelson said.
“Most of the ashes we have in storage pre-date the 1970s, with some going back to the 1930s.
“Some have limited information on the labels, or they’re so faded we can’t read them at all.”
John Scott, president of the National Funeral Directors Association of Australia, said every funeral director in the country would be in the same position
“I have ashes here going back 30 or 40 years, which I have retained. No one is really sure of the legal ramification of disposing of cremated remains,” Mr Scott said.
He said families often did not collect cremated remains because they were unsure what to do with the ashes.
Mr Scott said funeral directors needed to establish industry-wide guidelines clearly informing people that unclaimed ashes would be scattered in a designated location.
“Above all, it has to be respectful. We have to be mindful of the feelings of family members, even after several generations.”
Southern Metropolitan Cemeteries Trust chief executive Russ Allison said there were different rules for crematoriums.
“After a certain period of time, we write to family members and ask if they would like us to scatter the ashes within our grounds,” he said.
“If we don’t get a response, the ashes are scattered within our grounds in a garden area.”
He estimated 15 per cent of cremated remains were scattered in unmarked garden areas at the cemetery, either because families requested it, or because the remains were uncollected and no further instructions were given.