Elven Reincarnation

Post-Curse elves don't go on to the afterlife, instead, they reincarnate. During their trance, they experiences snippets of memories from past lives.
This reincarnation is not on an individual basis - it's not like Faeranduil becomes Koriel in the next life. Instead, elven souls are torn apart and reconstituted into new souls, which each have snippets of several elves.
This process is one of the main driving forces behind the rapid proliferation of different elven subraces, because this mixing process clustered and amplified the slight variations between elves.