Although Judaism focuses primarily on life in the here-and-now, the belief in an afterlife is well established, with references found in the Torah. In several places, there are indications that the righteous, but not the wicked, will be reunited with their loved ones. A number of Biblical luminaries (Abraham, Jacob, Moses, and others), are said to have been “gathered to their people” after their death.
While the idea of an afterlife is firmly established in traditional Judaism, little in the way of doctrine and tenets surrounds it. As a result, you will find different conceptions about the afterlife within Judaism, including some that consider the entire notion irrelevant.
Many Hasidic sects believe in reincarnation, which is an element in Kabbalah. Some hold that the souls of the righteous are reborn to continue their good work, while other sources indicate that a soul is reincarnated only if there's a need to complete some unfinished business, such as repaying a loan.
Among the Orthodox, some are of the opinion that wicked souls will be tormented by demons of their own making or that they will cease to exist altogether. There are those who believe in reincarnation, while others think it is a matter of waiting for resurrection. In any event, reincarnation and resurrection are not incompatible, and one does not preclude the other. It's important to remember, however, that regardless of what ideas you choose to accept or reject about the soul and the afterlife, a Jew is still expected to live his or her life in accordance with the Jewish laws and principles.
During biblical times, the Jews believed in sheol, a world of shadows wherein dwell the dead. Later, they came to believe in a paradise called Gan Eden (Garden of Eden), not to be confused with the famous garden inhabited by Adam and Eve. This concept is somewhat similar to the Christian idea of Heaven.
Only the righteous go directly to Gan Eden. Most souls descend to Gehinnom, the valley of Hinnom, which is a place of punishment or purification. Souls are not consigned to Gehinnom for eternity but only for a limited time. The idea of a soul's being damned forever is not consistent with Judaism. In fact, the Jewish tradition maintains that all souls will ultimately be resurrected.
Gehinnom is named for a place that really existed in Biblical times. Located outside Jerusalem, the historical Gehinnom was a place inhabited by pagans who offered their children as sacrifices, thus earning a reputation as the most abominable place imaginable.