They are separated from their past life and are now a new creation in God's Kingdom. This is an act whereby God gives man a new life. It is not the old life changed, but the impartation of a new life from above. It is not the turning over of a new leaf but a supernatural act of God that supercedes man's natural abilities to change. It is a spiritual awakening quickened by God.
Justification involves two very important events.
The forgiveness of sins. It is the total removal of sin so that there is no more sinful residue or guilt or impending punishment. The imputation of Christ's righteousness. This is forgiveness of sins taken a step further whereby we also receive the righteousness of Christ. God no longer looks at us and sees a sinner forgiven, but a person who is as righteous as Christ.