When drafting a will, understanding the legal terminology is crucial to ensuring your estate is distributed according to your wishes. Among the most important terms you’ll encounter are “per stirpes” and “per capita.” Although these Latin phrases might seem complex, they play a vital role in determining how your assets are allocated among your beneficiaries, especially if one of them predeceases you.
The Role of Beneficiaries and Contingent Beneficiaries: In your will, you designate beneficiaries—individuals who will inherit your property after your death. It’s essential to name both primary beneficiaries and contingent beneficiaries. Contingent beneficiaries act as backups, inheriting assets if the primary beneficiaries are unable to do so. This is where the terms per stirpes and per capita come into play, as they help clarify how assets should be distributed if a beneficiary predeceases you.
Per Stirpes Distribution Explained
The term “per stirpes” translates to “by branch” in Latin. Under a per stirpes arrangement, if a beneficiary dies before you, their share of the estate is passed down to their descendants, such as children or grandchildren. This ensures that each branch of the family tree receives an equitable portion of the estate. For instance, if one of your children is no longer alive, their share would be divided equally among their offspring. Some legal documents might use the phrase “by right of representation” instead of per stirpes, but both terms are interchangeable and mean the same thing.
Per Capita Distribution Explained
“Per capita,” which translates to “by head,” ensures that all beneficiaries within the same generation receive equal shares of the estate. There are different ways to implement a per capita distribution in a will, often specified as either “to my children, per capita” or “to my descendants, per capita.”
To My Children, Per Capita
If you specify “to my children, per capita,” your estate will be divided equally among your surviving children. If one of your children predeceases you, their intended share will not pass to their offspring but will instead be reallocated among your remaining living children.
To My Descendants, Per Capita
Choosing “to my descendants, per capita” means that your estate will be divided equally among all your living descendants, which includes not only your children but also grandchildren, great-grandchildren, and so forth.
Practical Example: Per Stirpes vs. Per Capita
Consider you have three children: Alan, Beth, and Claude. Your will specifies that your estate should be divided equally among them. If Alan dies before you and leaves behind two children, how your estate is distributed depends on whether you opted for per stirpes or per capita.
- Per Stirpes: Alan’s children would inherit his one-third share, divided equally between them. Thus, each of Alan’s children would receive one-sixth of the estate, while Beth and Claude would each receive one-third.
- To My Children, Per Capita: The estate would be divided only between Beth and Claude, each receiving one-half. Alan’s children would not inherit anything from Alan’s share.
- To My Descendants, Per Capita: The estate would be divided equally among all living descendants. Beth, Claude, and Alan’s two children would each receive one-fourth of the estate.
Key Differences Between Per Stirpes and Per Capita
While both terms are used to determine the distribution of assets should a beneficiary predecease you, they produce different outcomes:
- Per Stirpes (“by branch”): The inheritance passes down the family tree, ensuring that the descendants of a deceased beneficiary receive their share.
- Per Capita (“by head”): The estate is divided among all living beneficiaries within the same class. This can be limited to children or expanded to include all descendants.
Understanding these terms ensures that your will accurately reflects your wishes. While the terminology may seem daunting, it’s essential for ensuring your estate is distributed according to your preferences.
