Objection 1. It would seem that the dead cannot be assisted by the works of the living. First, because the Apostle says (2 Corinthians 5:10): "We must all be manifested before the judgment seat of Christ, that every one may receive the proper things of the body, according as he hath done." Therefore nothing can accrue to a man from the works of others, which are done after his death and when he is no longer in the body.
Objection 2. Further, this also seems to follow from the words of Apocalypse 14:13, "Blessed are the dead who die in the Lord... for their works follow them."
Objection 3. Further, it belongs only to one who is on the way to advance on account of some deed. Now after death men are no longer wayfarers, because to them the words of Job 19:8, refer: "He hath hedged in my path round about, and I cannot pass." Therefore the dead cannot be assisted by a person's suffrages.
Objection 4. Further, no one is assisted by the deed of another, unless there be some community of life between them. Now there is no community between the dead and the living, as the Philosopher says (Ethic. i, 11). Therefore the suffrages of the living do not profit the dead.
On the contrary are the words of 2 Maccabees 12:46: "It is... a holy and wholesome thought to pray for the dead that they may be loosed from sins." But this would not be profitable unless it were a help to them. Therefore the suffrages of the living profit the dead.
Further, Augustine says (De Cure pro Mort. i): "Of no small weight is the authority of the Church whereby she clearly approves of the custom whereby a commendation of the dead has a place in the prayers which the priests pour forth to the Lord God at His altar." This custom was established by the apostles themselves according to the Damascene in a sermon on suffrages for the dead [De his qui in fide dormierunt, 3, where he expresses himself thus: "Realizing the nature of the Mysteries the disciples of the Saviour and His holy apostles sanctioned a commemoration of those who had died in the faith, being made in the awe-inspiring and life-giving Mysteries." This is also confirmed by the authority of Dionysius (Hier. Eccl.), where he mentions the rite of the Early Church in praying for the dead, and, moreover, asserts that the suffrages of the living profit the dead. Therefore we must believe this without any doubt.
I answer that, Charity, which is the bond uniting the members of the Church, extends not only to the living, but also to the dead who die in charity. For charity which is the life of the soul, even as the soul is the life of the body, has no end: "Charity never falleth away" (1 Corinthians 13:8). Moreover, the dead live in the memory of the living: wherefore the intention of the living can be directed to them. Hence the suffrages of the living profit the dead in two ways even as they profit the living, both on account of the bond of charity and on account of the intention being directed to them. Nevertheless, we must not believe that the suffrages of the living profit them so as to change their state from unhappiness to happiness or "vice versa"; but they avail for the diminution of punishment or something of the kind that involves no change in the state of the dead.
Reply to Objection 1. Man while living in the body merited that such things should avail him after death. Wherefore if he is assisted thereby after this life, this is, nevertheless, the result of the things he has done in the body. Or we may reply, according to John Damascene, in the sermon quoted above, that these words refer to the retribution which will be made at the final judgment, of eternal glory or eternal unhappiness: for then each one will receive only according as he himself has done in the body. Meanwhile, however, he can be assisted by the suffrages of the living.
Reply to Objection 2. The words quoted refer expressly to the sequel of eternal retribution as is clear from the opening words: "Blessed are the dead," etc. Or we may reply that deeds done on their behalf are somewhat their own, as stated above.
Reply to Objection 3. Although, strictly speaking, after death souls are not in the state of the way, yet in a certain respect they are still on the way, in so far as they are delayed awhile in their advance towards their final award. Wherefore, strictly speaking, their way is hedged in round about, so that they can no more be changed by any works in respect of the state of happiness or unhappiness. Yet their way is not so hedged around that they cannot be helped by others in the matter of their being delayed from receiving their final award, because in this respect they are still wayfarers.
Reply to Objection 4. Although the communion of civic deeds whereof the Philosopher speaks, is impossible between the dead and the living, because the dead are outside civic life, the communication of the spiritual life is possible between them, for that life is founded on charity towards God, to Whom the spirits of the dead live.
Source: Summa Theologica (New Advent)