One of those oldest military traditions, the caparisoned horse is a military tribute in full-honor funerals honoring the fallen warrior. The horse is led in a funeral procession behind the casket to honor the deceased, with an empty saddle and the rider's boots backwards in the stirrups. It is a symbolic part of full-honor military funerals now, but it has roots as almost a religious custom.
The custom dates back to ancient times when the Tartars and Mongols held the belief that when a person died, if their trusty steed was killed it would follow them to the afterworld and serve them. Otherwise, the horse's master would have to walk in the afterlife. So the tradition was to sacrifice the horse after the death of its master. The horse was usually covered and hooded, and the saddle had reversed stirrups with the fallen soldier's sword hung through them.
However, the tradition has evolved and been modified over time. The horse is no longer sacrificed - although this has been known to happen into the late 1700s and early 1800s. One of the earliest uses of the caparisoned horse in the fashion it is used now, was with the funeral of President Abraham Lincoln. The president's horse followed the caisson carrying the casket, with its masters boots placed backwards in the stirrups.
This tradition has continued for military funeral honors for those achieving the rank of Colonel or higher in the US Army or Marine Corps, which also extends to the President as Commander-in-Chief of our Armed Forces. It may be accorded to those with past mounted service in the Armed Forces, as well. A Caparisoned horse was used in the internment of each of the "Unknown Soldiers."
The Caparisoned Horse, if black, wears standard equipment of the saddle and blanket, as well as a bridle. Other colors of horses used for this honor also have a black hood and cape in addition to the norm. The black saddle blanket is trimmed in white, and will have stars in the lower right-hand corner indicating rank if the deceased service member was a General officer. In the stirrups are the riding boots, placed backwards. On the side of the horse one dismounts, the officer's saber is also found, placed vertically.
This extremely somber military honor is one of the highest found in military funerals today. It is a solemn reminder that the horse's rider has fallen as a warrior and will ride no more.
Source for some information: Military District of Washington Fact Sheet: http://www.mdw.army.mil/FS-H03.HTM