Ashkenazi Jews do not name their children after someone who is alive at the time. Moreover, they won’t name after a deceased individual if a close living relative has the same name. Sephardic Jews, on the other hand, do name their children after living relatives—and it is very much an honor for that relative.

Ashkenazi Jews refrain from naming after living relatives because:

  1. Since it is a widespread custom to name children after deceased parents, grandparents and great-grandparents, naming after a living one could appear as though you're waiting for that person to die, G‑d forbid.1
  2. Out of respect for our parents we don't refer to them by their given names.2

Some say that when in the presence of a parent, you shouldn't use that parent's name even to refer to somebody else.3 For example, if your mother’s name is Sarah, you shouldn't refer to your friend - who is also Sarah - by name in front of your mother. If we would name our children after our living parents—well, you can imagine the confusion!4

But under certain circumstances Ashkenazi parents can give their child a name which is shared by a living relative.

  1. If the relative has two names, some authorities maintain that it is permissible to name a baby after another individual who had only one of the names. So if the grandmother, for example, was named Rebecca Deborah, it would be permissible to name the child either Rebecca or Deborah after a deceased person by that name.
  2. Though quite uncommon, a parent or grandparent can choose to allow the child to bear his/her name.

On a similar note, if a child is being named in honor of a righteous individual or Torah scholar, the namesake can be alive.5