Flag code says only that the flag should be retired by burning.
Flag Code does not specify or limit who may do so.
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(k) The flag, when it is in such condition that it is no longer a
fitting emblem for display, should be destroyed in a dignified way,
preferably by burning.
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A flag retirement ceremony may also be a family activity. It provides an opportunity to teach and instruct. If retiring the flag as a family, the following steps might be considered:
1. Gather the family around. Raise the flag on the pole or staff or hold it aloft by hand.
2. Call the group to attention, salute and recite the Pledge of Allegiance to the Flag.
3. The leader might say something like, "This flag has served its nation well and long. It is now worn to a condition in which it should no longer be used to represent the nation. We pay honor to this flag for the service it has rendered."
4. Fold the flag according to procedures explained on this site. (Folding the Flag)
5. Give the flag to the group leader who will burn it until it is completely consumed.
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The Veterans Department of Affairs suggests starting by folding the flag in a customary triangle manner. Then prepare a large enough fire space to sufficiently burn the flag completely. Next place the flag in the fire and while it burns, individuals at the ceremony should salute or recite the Pledge of Allegiance. Finally, end the ceremony with a moment of silence and bury the ashes once the flag is completely consumed.