The Dwarves are often thought to be a greedy and miserly race, but there are times when they will give rewards to those who have genuinely earned them.
(OOC-I added the names of all those who did submissions but only mine has shown up, for some reason. The others are the following; axlerowes, Echomirage, Ancient Gamer ,Dossta , Pariah.)
A possible answer to what happens to spells when a mage dies. If the spell is strong enough, say and enchantment or other permenant effect, part of the mages spirit may become lodged in the magic. It may be a way for items to gain some kind of intelligence, but a mage who has knowledge of this fact would be very hesitant about enchanting anyone or thing. He might have other plans for his afterlife than counting the change in your bag of holding.
Preists, I think, would have this sort of thing covered.