When I started my legacy, I kept the urns of my deceased sims on the lot, but it became quickly pretty annoying, with the ghost waking up the family all the time. So I placed a small lot next to the family lot and built a graveyard with some entertainement for the ghosts. I´m now on generation 10 and had to move to another town several times, because even with overwatch and so on, the saves become laggy after some time. Before I move them, I place all gravestones in one of my sims inventory, and after the move I put them back in the family graveyard (which I build new, because usually there is no convinient small lot next to the big family lot I need). It works pretty well, the ghost of my founder is still active sometimes.
Sometimes, if I like a sim a lot, their urns stay on the home lot for a while.
The diplomas and stuff I placed on the walls of the second floor of the family home, which is just a big room, because I don´t like several floors and only use the first one. To be perfectly honest, I stopped bothering with it after some generations.