I found a good link with information about this issue here:
The Postmortal Spirit World
And here’s another very good explanation (from
Death, Physical):
When the physical body dies, the spirit continues to live. In the spirit world, the spirits of the righteous “are received into a state of happiness, which is called paradise, a state of rest, a state of peace, where they shall rest from all their troubles and from all care, and sorrow” (Alma 40:12). A place called spirit prison is reserved for “those who [have] died in their sins, without a knowledge of the truth, or in transgression, having rejected the prophets” (D&C 138:32). **The spirits in prison are “taught faith in God, repentance from sin, vicarious baptism for the remission of sins, the gift of the Holy Ghost by the laying on of hands, and all other principles of the gospel that [are] necessary for them to know” (D&C 138:33-34). If they accept the principles of the gospel, repent of their sins, and accept ordinances performed in their behalf in temples, they will be welcomed into paradise. **
Because of the Atonement and Resurrection of Jesus Christ, physical death is only temporary: “As in Adam all die, even so in Christ shall all be made alive” (1 Corinthians 15:22). Everyone will be resurrected, meaning that every person’s spirit will be reunited with his or her body—“restored to their proper and perfect frame” and no longer subject to death (Alma 40:23; see also Alma 11:44-45).
I’d also like to add some clarification of the belief of Spirit Prison. Basically, Spirit Prison is a “last chance” place for people to accept the True Plan of Jesus Christ. According to the lessons I remember learning in church growing up, by the time Jesus comes again, all will have had baptism by proxy done for them. So everyone will have that opportunity to accept the gospel and have the fullness of the blessings even if a person was not Christian in life.
I was taught that a
deceased person in Spirit Prison has to accept the gospels or they will not be saved and go to Celestial Kingdom.Here’s where it always got tricky for me. The practice of baptism for the dead in the temple implies that the same blessings are given to the dead that are given to the living with baptism and laying on of hands, including the
remission of sins. So … does this mean that my uncle, who was an adulterer and a non-believer all his life, has had his sins washed away and has all of the same blessings as a live person who lived cradle to grave as a faithful Mormon? Let’s take this one step further … for arguement’s sake, let’s say that Adolf Hitler and Eva Braun really were baptized by proxy and sealed by proxy in a Mormon Temple.
No, seriously. Does their baptism by proxy mean that all of Hitler’s sins were washed away? How binding are these ordinances?