Praise be to Allaah.
The correct view is that the dead can benefit from the physical acts of worship undertaken by their living relatives with the intention of giving the reward to them (physical acts of worship include fasting and reading Qur’aan). The same applies to financial acts of worship, such as giving charity on behalf of the deceased or freeing a slave on his behalf, even though some of these actions are not prescribed as such.
This is indicated by the hadeeth of Sa’d ibn ‘Ubaadah (may Allaah be pleased with him), who gave his garden in charity on behalf of his mother who had died, and the Prophet (peace and blessings of Allaah be upon him) approved of that (narrated by al-Bukhaari), and other ahaadeeth.
But giving charity on behalf of the deceased is better than reading Qur’aan for them, just as making du’aa’ for them and seeking forgiveness for them is better than other deeds.
If you give in charity on behalf of your deceased relative, or you make du’aa’ for him – or other actions – the deceased will benefit from that, and you will also have the reward for that, for the Bounty of Allaah is immense.
With regard to raising one's hands when making du’aa’: this is not bid’ah; in fact it is Sunnah and is part of the teachings of guidance and one of the means of having one’s du’aa’s answered. It was narrated in a saheeh report that the Prophet (peace and blessings of Allaah be upon him) said: “Allaah is modest and most generous; if a man raises his hands to Him, He cannot send them back empty and unanswered,” (Narrated by Ahmad and Abu Dawood from the hadeeth of Salmaan).
But it is makrooh to raise one’s hands at certain times, such as when the khateeb makes du’aa’ at Jumu’ah prayers, unless the khateeb is praying for rain at Jumu’ah prayers, in which case it is prescribed to raise one's hands. This was reported in a saheeh hadeeth from the Messenger of Allaah (peace and blessings of Allaah be upon him).
Similarly, it is not permitted to raise one's hands in congregation or individually after praying a fard prayer, as there is no evidence for doing so. Wiping the face, chest or body after making du’aa’ is bid’ah and is not permitted. And Allaah knows best.
Sheikh Muhammed Salih Al-Munajjid