Takeaways
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“Per stirpes” and “per capita” are terms used in estate planning that refer to the distribution method for the assets of a deceased person to their heirs.
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The distinction can significantly affect how assets are shared among family members. When deciding which distribution method to use, consider your family dynamics and the potential for any future disputes.
A Will Is Part of Your Estate Plan
Creating an estate plan is essential for ensuring that your wishes are honored regarding who inherits your money and property and that your loved ones are taken care of after you’re gone. It can also help reduce stress and confusion among your family members during a difficult time.
A last will and testament, often simply called a will, is a key legal document in your estate plan. When you create a will with an estate planning attorney, one main decision to make is how you would like your assets to be distributed to your heirs after you pass away. You might come across such terms such “per stirpes” and “per capita” distribution during the estate planning process; understanding these legal terms is key to that decision.
The terms “per stirpes” and “per capita” become important when your descendants include children and grandchildren. In a will, these terms are often written as “I leave my [fill in the blank] to my descendants, per stirpes (or per capita).”
Per Stirpes
Distributing your assets per stirpes (sometimes called “by right of representation”) means that your money and property will be divided evenly among your children. However, if one of your children predeceases you, their children (your grandchildren) will inherit their parent’s share.
For example, Connie has three children: Cara, Russ, and Susan. When Connie dies, Cara, Russ, and Susan each inherit a one-third share of Connie's estate. However, if Susan dies before Connie, Susan’s two children, Gabby and Austin, will inherit Susan’s one-third share. The distribution would be as follows: one-third to Cara, one-third to Russ, one-sixth to Gabby, and one-sixth to Austin.
Generally, the terms per stirpes and “by right of representation” are used interchangeably. However, there is a variation on “right of representation,” which is used in some states if two or more children predecease you. In that situation, suppose in addition to Susan, Cara also dies before Connie, leaving three children of her own, Madison, Darcy, and Anya.
Under regular per stirpes distribution, Madison, Darcy, and Anya would split Cara’s one-third share, while Gabby and Austin split Susan’s one-third share. Under the variation, these grandchildren would inherit an equal amount. In that situation, Russ would receive one-third while Gabby, Austin, Madison, Darcy, and Anya would each equally divide the remaining two-thirds.
Per Capita
On the other hand, per capita means that the inheritance is divided equally among all surviving heirs at the same level. For example, Connie’s will might read: “I leave my entire estate to my children, per capita.”
When Connie distributed her assets this way and her daughter Susan predeceased her, her living children will inherit equally. This would leave Cara and Russ to inherit an equal share of Connie's estate. Connie's grandchildren would not inherit anything directly from Connie.
Connie might have instead chosen to leave her entire estate to her descendants, per capita. In that case, if Susan had predeceased her, her grandchildren Gabby and Austin would inherit a share of the estate equal to that of Connie's children Cara and Russ. The distribution would be: one-fourth to Cara, one-fourth to Russ, one-fourth to Gabby, and one-fourth to Austin.
Work With an Estate Planning Attorney
These terms can make a big difference in how an estate is distributed, and states have differences in how they interpret the terms. Make sure your property will be distributed the way that you want by consulting with an experienced elder law attorney near you.
Working with an estate planning attorney is crucial for ensuring that your wishes are clear and legally binding. These professionals understand the complexities of estate laws, which can vary significantly from state to state. They can help you navigate potential pitfalls, such as tax implications and disputes among heirs.
An attorney will also assist in drafting essential documents, such as wills and trusts, that reflect your intentions accurately. By collaborating with an expert, you can create a comprehensive plan that protects your assets and provides peace of mind for you and your loved ones, ensuring your legacy is honored as you envisioned.
For further reading on some of the basics of estate planning, check out the following articles: