What Is Per Stirpes?
Per stirpes is a Latin phrase that translates to “by branch.” In the context of estate planning, it denotes how assets are distributed if a named beneficiary dies before the person who has established the will (the testator). Specifically, the deceased beneficiary’s share of the estate will pass to their heirs or descendants. This term is not only prevalent in wills but also in beneficiary designations within retirement accounts such as IRAs.
Key Insights
- Meaning: Per stirpes means “by branch,” indicating that inheritance follows a family branch in case a beneficiary is deceased.
- Legal Stipulation: It ensures that a beneficiary’s share passes to their descendants.
- Beneficiaries: Descendants such as children inherit under a per stirpes distribution, while spouses typically do not.
- Applications: Commonly used in wills and retirement account beneficiary designations.
How Per Stirpes Works
Per stirpes involves passing inheritance down through your family tree. For instance, if one of your children (a named beneficiary) passes away before you, their share would subsequently go to their children (your grandchildren). This ensures the family branch continues to inherit the intended assets.
Understanding Per Stirpes vs. Per Capita
Per capita means “by the heads” and divides assets equally among surviving descendants at the nearest generation level. It does not consider direct descendants below the primary beneficiaries if one installed recipient dies. Here’s how it plays out:
Example:
- Alejandra specifies her estate distribution per capita among her children Abigail, Stephanie, and Oliver.
- If Abigail dies, her share is evenly split between Stephanie and Oliver, leading none to Abigail’s child George.
Per Stirpes Example:
- Similarly, if Alejandra arranges for a per stirpes distribution, Abigail’s share, posthumously, would go to her offspring George. Stephanie, Oliver, and Oliver’s kids (Hanaj and Anil) receive no portion generated from Abigail’s inheritance.
Criticisms and Misconceptions
Although fundamental, per stirpes can be tricky, with outdated terminology causing more confusion than clarity. Misuse, such as vague statements like
Related Terms: per capita, estate planning, beneficiary, testator, descendants, inheritance.
References
Get ready to put your knowledge to the test with this intriguing quiz!
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## What does "per stirpes" represent in terms of inheritance?
- [ ] Dividing the estate equally among all descendants
- [x] Distribution of an estate by branch or lineage, ensuring equal share for each branch of the family
- [ ] Ascending inheritance to ancestors like parents or grandparents
- [ ] Gift of entire estate to the oldest descendant
## In a "per stirpes" distribution, what happens if one of the intended beneficiaries has predeceased the testator?
- [x] The deceased beneficiary’s share is divided among their descendants
- [ ] The entire share goes to the surviving beneficiaries equally
- [ ] The deceased beneficiary’s share is returned to the estate
- [ ] The testator’s spouse automatically inherits the share
## Which distribution method differs from "per stirpes" by ensuring equal shares among each individual rather than each branch?
- [ ] Per stirpes
- [x] Per capita
- [ ] Per annum
- [ ] Per contra
## If a will specifies a "per stirpes" distribution, who receives the share skipped by deceased beneficiaries?
- [ ] The governmental treasury
- [ ] Charitable organizations
- [x] The descendants of the deceased beneficiary
- [ ] No one; it is redistributed among surviving beneficiaries only
## Why might someone choose "per stirpes" distribution for their estate?
- [ ] To avoid any descendants receiving any shares
- [ ] To ensure only their immediate children inherit
- [x] To ensure fair distribution across family branches, even if some beneficiaries are deceased
- [ ] To complicate the inheritance process
## Which of the following scenarios accurately illustrates "per stirpes" inheritance?
- [ ] A parent divides their estate equally among their three children regardless of grandchildren.
- [x] A parent’s estate is divided equally among children, but if any of the children are deceased, their share goes to their own descendants.
- [ ] A parent’s estate all goes directly to the spouse universally.
- [ ] Every relative receives an equal share regardless of branches.
## If all of a deceased testator's children have predeceased them, who inherits under "per stirpes"?
- [x] The grandchildren, receiving their deceased parents' shares
- [ ] The state designates recipients
- [ ] The estate is divided among friends
- [ ] The oldest living relative inherits everything
## How does "per stirpes" differing from "per capita" affect inheritance?
- [x] "Per stirpes" follows family branches, while "per capita" gives equal shares to living members
- [ ] "Per stirpes" concentrates wealth in a single heir
- [ ] "Per stirpes" favors non-relatives
- [ ] "Per stirpes" reduces taxes on inheritance
## When dealing with a "per stirpes" clause, the term "stirpes" typically refers to?
- [x] Branches of the family tree or lineage
- [ ] Amount received by the government
- [ ] Types of property inherited
- [ ] Financial value of the inheritance
## Under "per stirpes" distribution, what is a significant legal advantage?
- [ ] Excludes complex documentation
- [x] Ensures inheritance follows familial lineage, protecting grandchildren's rights
- [ ] Slowly distributes assets over lifetime
- [ ] Helps avoid probate process completely
