Per Stirpes or Per Capita: Does it Matter?
Two ways for distributing property in a testator’s Will are per stirpes (Latin for “by the roots”) and per capita (Latin for “by the heads”).
Distributions made per stirpes provide that members of a designated class, for example, all of a testator’s children, including deceased children, shall inherit as members of the class. Heirs of a deceased member inherit the deceased member’s share, standing in place of the deceased member.
In contrast, distributions made per capita provide that members of a designated class, including heirs of a deceased member, shall inherit equally.
The difference between distributions made per stirpes and per capita becomes important when a testator’s Will distributes assets to his or her children and, for example, a child dies before the testator and is survived by his or her own children.
Consider the following:
When Bob created his Will, he had three children – Larry, Tom, and Sally. Sally had two children. Bob intended to divide his $600,000 estate equally among his three children. Therefore, Bob intended for each of his children to inherit $200,000.
What would happen if Sally dies before Bob?
If Bob’s Will stated that distributions are to be made per stirpes, Bob’s $600,000 estate would be divided into three equal shares – one share for each of his children. Larry and Tom would each receive $200,000, and Sally’s two children would stand in place of Sally and receive her share, each receiving $100,000.
In contrast, if Bob’s Will stated that distributions are to be made per capita, Bob’s $600,000 estate would be divided into four equal shares. Larry, Tom, and Sally’s two children would each be counted as an equal member of the designated class, and each would receive $150,000 from Bob’s estate.
Smart estate planning lets you determine the distribution of the assets in your entire estate to protect your loved ones in the most efficient manner. If you are interested in creating or updating your estate plan, we at The Becker Law Firm would be happy to help you.