I am not aware of any sources who say that naming a baby after a deceased relative elevates his neshamah

Prepared for print by Faigy Peritzman
When your daughter married this Sephardic boy, she committed herself — presumably with your agreement and blessing — to follow her husband’s customs. So if your son-in-law insists this minhag be followed, you have no choice but to accept. But if your son-in-law asks you if you wish to receive this honor, and leaves it up to your discretion, then you should decline, since this is not the custom of bnei Ashkenaz.
No, your child’s self-esteem and potential embarrassment (or being targeted for bullying) is more important. If you wish to perpetuate your uncle’s name, donate some seforim to a shul or dedicate a day of learning as an aliyah for his neshamah.
I am not aware of any sources who say that naming a baby after a deceased relative elevates his neshamah. The only way to elevate a neshamah (other than by saying Kaddish and lighting a yahrtzeit candle) is by learning additional Torah, giving more tzedakah, and participating in extra chesed activities, while dedicating the zechusim to the deceased.
Choose a Hebrew name that is similar or close in meaning or pronunciation to your father’s secular name. If, for instance, his name was John, you can call your newborn son Yonasan. If your mother’s name was Rose, you may name your daughter Shoshanah.
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