20 Aug Where There Is A Will, A Beneficiary May Want To Be Named In It Per Stirpes Vs. Per Capita – Who Gets My Estate If A Beneficiary Predeceases Me?
In drafting a will or a trust or in making a beneficiary designation, one of the most common questions that should be asked is “who would be entitled the share of my estate if a beneficiary predeceases me?” When you do not want to name an individual or individuals or a charity or a religious institution as a contingent beneficiary in the event a named beneficiary predeceases you, then it is common to use the legal term “per stirpes” or “per capita” to describe the testator’s (the one who establishes a last will and testament) or trustor’s (the one who establishes a trust) intent to how assets are divided or distributed.
“Per Stirpes” is the Latin term for “by branch” or “by root”. So, if a named beneficiary predeceases you and you indicated in your will, trust or beneficiary designation “per stirpes”, heirs of the predeceased beneficiary would equally receive the share the named beneficiary would have received had he or she survived you. So, for example, let’s say you have 3 children – Groucho, Harpo and Zeppo and let’s say Groucho had 3 children, Harpo had 2 children and Zeppo had 1 child. If your will said “I give the rest and residue of my estate equally to my children, per stripes, then distribution would be as follows: if Groucho predeceased you, then his 3 children would each be entitled to 1/3 of Groucho’s 1/3 share (or 1/9th). If Harpo had predeceased you, then his 2 children would each be entitled to 1/2 of his 1/3 share (or 1/6th). If Zeppo predeceased you, then his child would receive his 1/3 share. Therefore, even if a child predeceases you, then you normally wouldn’t have to revise your will – even if your child has additional children after you signed your will.
However, sometimes that is not desired. So, for example, if the testator or trustor didn’t want one of Groucho’s children to inherit should Groucho predecease the testator or trustor, then per stripes may not have been the desired term unless there was a specific disinheritance clause.
On the other hand, “per capita” is the Latin term meaning “per head”. Only your surviving beneficiaries would receive under your will or trust if the term “per capita” is used. So, for example, if Groucho, Harpo or Zeppo predeceased their parent and their parent’s will said “I give the rest and residue of my estate to my children, per capita”, then the survivor(s) would be the only beneficiary or beneficiaries of the will (which could result in unintended consequences). So, if Groucho predeceased his parent and Harpo and Zeppo survived their parent, then Harpo and Zeppo would each receive 1/2 of the estate and Groucho’s children would receive nothing. If Groucho, Harpo and Zeppo predeceased their parent, then each of the 6 grandchildren would receive 1/6th (instead of taking the share of their parent).
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