Per Stirpes: Providing Equitable Inheritance
Estate planning is undeniably important, but it can also be confusing. That is why we would like to explain the difference between two stipulations, per stirpes and per capita, and how they differ. We get these two phrases from Latin, with per stirpes translating to “by branch” and per capita to “by the heads.” As suggested by its translation, if you opt for per stirpes, your inheritance will be split evenly among each branch of your family, which we will explain shortly. On the other hand, per capita refers to each of your beneficiaries receiving an equal portion of your inheritance — which, when you break it down, can yield significantly different results. Here is why. Per Stirpes Instead of splitting inheritance evenly among your beneficiaries, per stirpes would split it between the branches of your family. This becomes more relevant in the unfortunate circumstance that one of your children passes away before you. For example, let’s imagine you had three children, named Alex, Bert, and Cindy. Normally, under per stirpes, a third of your
inheritance would go to each of them. However, if Alex passed away, and was survived by two children, Alan and Bob, then the inheritance would be split four ways, with Bert and Cindy each receiving one-third share and Alan and Bob splitting the last third share. This, in other words, is a great way to provide an equitable inheritance and is why it is the most common mode of inheritance.
Per Capita Per capita, on the other hand, splits the inheritance
equally among your beneficiaries. To explain how this differs, we will revisit our example from earlier. Let’s say you had three children, Alex, Bert, and Cindy. If Alex were to pass away, despite his having
had two children, the inheritance would then be split two rather than four ways. Bert and Cindy would each receive one-half of your inheritance, and since Alex passed away, he would be omitted from the inheritance. Now that you know the differences between these modes of inheritance, you can make the best choice for you and your family.
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