We cannot speculate as to the state of this person’s soul. That would require real personal knowledge of an individual, and even then, it is speculation at best.
Catholic teaching, as Gamera said, is that we are not ever completely assured of our salvation. In Baptism, we are cleansed of original sin, and in the case of an adult, personal sin as well. This brings us into the New Covenant with Christ, marks us as belonging to Christ, and infuses us with grace that we may live and grow in faith. We believe that the outward symbol of going down into the water (as if into death) and then rising up again (as if in resurrection) accomplishes spiritually just what it symbolizes–new life in Christ. In other words, Catholics believe we are “born again,” as the Gospel says we must be, through the Sacramenrt of Baptism.
The Church teaches two important points in regard to God’s grace: 1) it is a gift offered to all humanity, freely given, and is the bedrock of our salvation–our only hope for eternal life. And 2) entering into the sacrament of Baptism and receiving this initial infusion of sacramental grace does not remove one’s free will, and therefore, a person may at any point in his life turn his back on that grace. In so doing, one would lose salvation.
Generally speaking, to turn your back on God’s grace is to commit what the Church calls mortal sin. There are three conditions that must be met for a sin to be called mortal. 1) it has to be a grave (serious) matter (e.g. murder, grand theft auto, blasphemy, purposefully and unjustly destroying the reputation of another, etc.), 2) the person must be fully aware of the fact it is gravely wrong and 3) it must be done with full consent of the free will (e.g. someone forced by means of torture to do something they know is wrong is not acting on their own free will). It should be noted that serious mental illness or addiction can mitigate a person’s guilt to some degree in that they can prevent them from acting with full consent of their free will.
Catholic teaching is that a person who dies in mortal sin, is condemned. However, only God fully knows our hearts, and God alone is the final judge of what is or is not mortal sin.
It is also important to understand that no sin is so grave that God cannot forgive it. To restore oneself to grace after committing mortal sin, one need only go to the Sacrament of Reconciliation (Confession) with a contrite heart. True contrition involves not only confessing and renouncing the sin, but also making an effort not to commit it again in the future For those who may die in a state of mortal sin without having gone to Confession, we may still hope that, before the moment of death, they made an act of perfect contrition to God and trust them to His mercy.
Those not in mortal sin at their death are saved. However, the Church teaches that most of us are not yet ready for heaven upon our death. We must undergo a cleansing or purification process before we can enter the Kingdom of God. You are correct in calling this Purgatory.
We pray for our dead, as we believe the grace we receive from the Lord through our devotion can be offered up for their relief, possibly shortening their stay in Purgatory. Any prayer or devotion you feel comfortable with is generally appropriate. Two common traditional prayers are:
V. May the Divine Assistance remain always with us
R. And may the souls of the faithfully departed, through the mercy of God, rest in peace.
or
V. Eternal rest grant unto them, O Lord
R. And let your perpetual light shine upon them.
It is also common to offer up a prayer hour, time spent meditating on Scripture, a Rosary, etc. for the souls in Purgatory. In the case that you are praying for a specific person that is not actually in Purgatory, we trust the Lord to apply those graces to other souls in such need.
