To distinguish the Law and the Gospel rightly, without dividing them, is as fundamental to the faith, and as difficult in this life under the Cross, as the distinguishing of the two natures in Christ without dividing His Person, and the distinction of the three Persons of the Holy Trinity without any division of the one true God.
This proper distinction of the Law and the Gospel belongs to the theology of the Cross, to the death of the old Adam and the rising of the New Man in us. This is the divine work of the Holy Spirit by the means of the Word. He who has begun this good work in us, shall also bring it to completion at the coming of our Lord Jesus Christ, in the resurrection of our bodies at the last. Yet, it is finished and complete, already for us, in the Cross and Resurrection of Christ Jesus, in the perfection of His glorified Body.
The Body of our crucified, risen and ascended Lord Jesus is our Anchor behind the Veil, that is, our Anchor within the Holy of Holies made without hands, eternal in the heavens. There He ever lives to make intercession for us before His God and Father, and we are sanctified in Him who is our righteousness and holiness, so that our life is safely hidden with Him in God. Therefore, it is by the way and the means of His Cross that the Holy Spirit also brings us daily in-and-out of death into the indestructible life of our merciful and great High Priest.
What that looks like, as we are confronted and met with the preaching of repentance for the forgiveness of sins, and as we live by the grace of God through faith in Christ, is the difficult distinction of the Law and the Gospel. In this, the old Adam is painfully divided from the New Man, in us, but we are not divided from the new and greater Adam who remains for us.