This vs That ⚡ Per Stirpes vs Per Capita

By TRG Advisors on May 17, 2021

Welcome back to This vs That – a comparison between common terminology, both related, yet different, and we’re here to break it down for you.

The estate planning terms per stirpes and per capita describe how you want your property to be left to your beneficiaries.

In some cases, these decisions are relatively simple. For situations where there are multiple beneficiaries at the same level (such as children, grandchildren, siblings, nieces, and nephews, etc.), you will need to consider whether you prefer a per stirpes or a per capita distribution.¹

Distributing per stirpes means the proceeds are to be distributed by branch of the family, while per capita means it’s to be divided by head.

Examples of Per Stirpes Distributions

For example, let’s say Rachel has three children: Adam, Katie, and Chris. Rachel decides to leave her estate “to her descendants, per branch of the family.��

If all three of her children survive her, each child inherits 1/3 of Rachel’s estate.

But what if one of Rachel’s children predeceases her? For example, if Adam and Katie survive Rachel, but Chris does not, you must determine whether Chris had any descendants (grandchildren of Rachel in this example) who survived Rachel. If he did not leave descendants, then Adam and Katie each inherit 1/2 of Rachel’s estate. Now, let’s take that same scenario, but this time, Chris did have two children who survived Rachel (Daniel and Haley). Under a per stirpes distribution plan, Chris’ entire share of the distributions would go to his children. This is how Rachel’s estate would pass:

• 1/3 to Adam
• 1/3 to Katie
• 1/6 to Daniel
• 1/6 to Haley

Examples of Per Capita Distributions

Let’s use the same example we reviewed above.

If Rachel’s estate was left “to my descendants, per head in the family” and she only had three children but no grandchildren, then her estate would be distributed 1/3 to each child.² Again, let’s suppose Chris has two children, and he predeceases Rachel. The distribution would change significantly to the following:

• 1/4 to Adam
• 1/4 to Katie
• 1/4 to Daniel
• 1/4 to Haley

There is no “right” or “wrong” distribution plan. For some, per stirpes best reflects their wishes. For others, per capita is the best decision for them. Reach out to us today to better understand the difference so you can make sure your beneficiary designations reference the strategy that best aligns with your goals and wishes.

Disclosure

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¹Source: JD Supra. “Understanding the Difference Between a ‘Per Stirpes’ and ‘Per Capita’ Distribution.”
²Source: Mastry Law. “What’s the Difference Between Per Capita and Per Stirpes Beneficiary Designations?”