Investigative Judgment
To understand the phrase "investigative judgment" we must first understand the sanctuary.
Thy way, O God, is in the sanctuary: who is so great a God as our God?
- Psalm 77:13 (KJV)
The sanctuary is a complicated subject, so I have tried to keep it as simple as I can.
The sanctuary is God's way of dealing with sin, and investigative judgment is part of that process.
The Old Covenant
Under the Old Covenant the sanctuary was on Earth.
It was a pattern of the one in Heaven, so that people could understand the process.
And let them make me a sanctuary; that I may dwell among them. According to all that I shew thee, after the pattern of the tabernacle, and the pattern of all the instruments thereof, even so shall ye make it.
- Exodus 25:8-9 (KJV)
The first version (tabernacle) was portable as Israel travelled through the wilderness for 40 years.
- By Ruk7 / Wikimedia Commons / CC BY-SA 3.0
The second version (temple) was built by Solomon in Jerusalem.
- Architectural model of the temple of King Solomon in Jerusalem by Thomas Newberry / Wikimedia Commons / CC0 1.0
It was later destroyed, and then rebuilt again.
The Earthly temple was done away with during the crucifixion.
Jesus, when he had cried again with a loud voice, yielded up the ghost. And, behold, the veil of the temple was rent in twain from the top to the bottom; and the earth did quake, and the rocks rent; And the graves were opened; and many bodies of the saints which slept arose, And came out of the graves after his resurrection, and went into the holy city, and appeared unto many.
- Matthew 27:50-53 (KJV)
We now have direct access to God, and we no longer need the sanctuary on Earth.
After that, the temple was destroyed in AD 70 by the Romans, just as Jesus said it would.
And Jesus went out, and departed from the temple: and his disciples came to him for to shew him the buildings of the temple. And Jesus said unto them, See ye not all these things? verily I say unto you, There shall not be left here one stone upon another, that shall not be thrown down.
- Matthew 24:1-2 (KJV)
That was literally fulfilled, e.g. every stone was indeed removed.
People that are talking today about rebuilding the temple again in Jerusalem fail to see that we no longer need the sanctuary on Earth.
The New Covenant
Under the New Covenant the true sanctuary is in Heaven. (It always was, but now Jesus has become our high priest)
Now of the things which we have spoken this is the sum: We have such an high priest, who is set on the right hand of the throne of the Majesty in the heavens; A minister of the sanctuary, and of the true tabernacle, which the Lord pitched, and not man.
- Hebrews 8:1-2 (KJV)
Things look a bit different in Heaven of course. 
- By Biblia Prints / FreeBibleimages.org / CC BY-NC-ND 4.0
But the principles are the same...
How it Works
There are three distinct areas in the temple:
- The Outer Court
- The Holy Place
- The Most Holy Place
A person would bring a sacrifical animal (say a lamb) to the Outer Court, put their hands on the animal, and transfer his/her sins to the animal. The animal would then be killed, and the blood would be sprinkled before the veil in the Holy Place by a priest. There now is a record of your sins, and the blood to cover it, within the sanctuary.
The blood of the sacrifical animal now covers the sins of that person.
And almost all things are by the law purged with blood; and without shedding of blood is no remission.
- Hebrews 9:22 (KJV)
This is actually very similar to how it is today, e.g. we confess our sins to Jesus (transfer), who died for our sins.
His blood covers our sins.
Much more then, being now justified by his blood, we shall be saved from wrath through him.
- Romans 5:9 (KJV)
That's why Jesus is called the Lamb of God.
The next day John seeth Jesus coming unto him, and saith, Behold the Lamb of God, which taketh away the sin of the world.
- John 1:29 (KJV)
The following part is very important to understand:
Although sins can be forgiven this way, there still is an overall judgment that needs to take place in the Most Holy Place, better known as The Day of Atonement.
Once a year in the Earthly temple, once in the Heavenly temple, on The Day of Atonement, the high priest would take two goats. The Lord's goat was slain as a sin offering (its blood sprinkled on the mercy seat in the Most Holy Place, and also on the altar in the Holy Place where the record of your sin is). This has a cleansing effect. The sins themselves were transferred to the scapegoat which was sent into to wilderness to die. The Lord's goat is symbolic for Jesus (He died for us), whereas the scapegoat is symbolic for satan (originator of sin).
By sprinkling the blood on the mercy seat the Law was "satisfied".
And almost all things are by the law purged with blood; and without shedding of blood is no remission.
- Hebrews 9:22 (KJV)
The Most Holy Place, and also the Holy Place, are cleansed of sin. The records of your sin are removed.
To summarize:
- The sins of the righteous are transferred to satan
- The sins of the wicked remain on them
Now that sin has been transferred to where it should be, God will remove root (satan) and branches (satan's followers).
For, behold, the day cometh, that shall burn as an oven; and all the proud, yea, and all that do wickedly, shall be stubble: and the day that cometh shall burn them up, saith the Lord of hosts, that it shall leave them neither root nor branch. But unto you that fear my name shall the Sun of righteousness arise with healing in his wings; and ye shall go forth, and grow up as calves of the stall.
- Malachi 4:1-2 (KJV)
Satan and the wicked will pay the price for their sins.
And I saw the dead, small and great, stand before God; and the books were opened: and another book was opened, which is the book of life: and the dead were judged out of those things which were written in the books, according to their works.
- Revelation 20:12 (KJV)
Who will render to every man according to his deeds.
- Romans 2:6 (KJV)
Jesus is our High Priest, and the judgment is His to make.
When the Son of man shall come in his glory, and all the holy angels with him, then shall he sit upon the throne of his glory: And before him shall be gathered all nations: and he shall separate them one from another, as a shepherd divideth his sheep from the goats: And he shall set the sheep on his right hand, but the goats on the left. Then shall the King say unto them on his right hand, Come, ye blessed of my Father, inherit the kingdom prepared for you from the foundation of the world: For I was an hungred, and ye gave me meat: I was thirsty, and ye gave me drink: I was a stranger, and ye took me in: Naked, and ye clothed me: I was sick, and ye visited me: I was in prison, and ye came unto me. Then shall the righteous answer him, saying, Lord, when saw we thee an hungred, and fed thee? or thirsty, and gave thee drink? When saw we thee a stranger, and took thee in? or naked, and clothed thee? Or when saw we thee sick, or in prison, and came unto thee? And the King shall answer and say unto them, Verily I say unto you, Inasmuch as ye have done it unto one of the least of these my brethren, ye have done it unto me. Then shall he say also unto them on the left hand, Depart from me, ye cursed, into everlasting fire, prepared for the devil and his angels: For I was an hungred, and ye gave me no meat: I was thirsty, and ye gave me no drink: I was a stranger, and ye took me not in: naked, and ye clothed me not: sick, and in prison, and ye visited me not. Then shall they also answer him, saying, Lord, when saw we thee an hungred, or athirst, or a stranger, or naked, or sick, or in prison, and did not minister unto thee? Then shall he answer them, saying, Verily I say unto you, Inasmuch as ye did it not to one of the least of these, ye did it not to me. And these shall go away into everlasting punishment: but the righteous into life eternal.
- Matthew 25:31-46 (KJV)
Sadly, most Christians don't fully repent.
The Cleansing of the Sanctuary
The Day of Atonement in Heaven is not just a day, it's actually a short period, or season.
We know that the cleansing of the Heavenly sanctuary started after 2,300 years (one day = one year).
And he said unto me, Unto two thousand and three hundred days; then shall the sanctuary be cleansed.
- Daniel 8:14 (KJV)
This prophecy started in 457 BC, just like Daniel's 70 week prophecy. Therefore the cleansing of the sanctuary started in 1844.
Now we know that Jesus, our High Priest, moved from the Holy Place to the Most Holy Place in 1844.
During the cleansing all the records are being looked at. At first, all the cases of the dead are looked at, but soon this judgment will move to the living.
God has been very patient with us, as we've been living in this period for more than 175 years.
The Lord is not slack concerning his promise, as some men count slackness; but is longsuffering to us-ward, not willing that any should perish, but that all should come to repentance.
- 2 Peter 3:8-9 (KJV)
What Does All of This Mean?
I know there is a lot to take in here, and it's not easy, but please understand that we are in the last days.
Soon the investigative judgment will shift from the dead to the living.
Are you right with God? Do you have more sins to confess? Does God know who you are?
Not every one that saith unto me, Lord, Lord, shall enter into the kingdom of heaven; but he that doeth the will of my Father which is in heaven. Many will say to me in that day, Lord, Lord, have we not prophesied in thy name? and in thy name have cast out devils? and in thy name done many wonderful works? And then will I profess unto them, I never knew you: depart from me, ye that work iniquity.
- Matthew 7:21-23 (KJV)
Now's the time to draw nigh to God.
Draw nigh to God, and he will draw nigh to you.
- James 4:8 (KJV)
And saying, Repent ye: for the kingdom of heaven is at hand.
- Matthew 3:2 (KJV)
Further Study
Ellen White is way better at explaining all of this. To read her version please click here.