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I've read Michael Newton's books--in which hypnotized clients not only experience past lives, but the experience of discarnate souls in-between lives. One thing I recall is that not all of the soul incarnates into the body in a given lifetime. Depending on the demands that will be placed on it during the lifetime, it might send more or less of itself into the body. If it sends half of its energy into the incarnation, the other half stays home and watches from the sidelines.
Don't hold me to this, but I suspect the "higher self" is the part of the soul that stayed behind. It knows the "script" the rest of it is playing out on earth, and what purpose it was supposed to fulfill by incarnating, and it can be tapped by its incarnated half for guidance. In fact, I think it's always feeding us guidance, which we get in the form of intuition, inspiration, and "gut feelings."
So if that really is the case, then we merge back with the rest of ourselves after death.
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