Per Stirpes Meaning Explained Examples Vs Per Capita

Per Stirpes Meaning

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When children or other relatives of the deceased person take per stirpes, it is taken by representation. They take this to represent their parents or other ancestors. This system is beneficial when the person wants to include successors far in the future and not just their children to enjoy a share in possessions.

Key Takeaways

Per stirpes is to specify who will receive the property if an individual’s beneficiaries die before they do. If one of the beneficiaries passes away before the individual does, their portion of the estate will be distributed to their descendants.This system inherits property for lineal heirs. Direct descendants, such as the individual’s children and grandchildren, are the “lineal descendants” of a beneficiary.The share of a deceased individual will be proportionately distributed among the beneficiaries (such as children). Or each member of the designated class (children or grandchildren) will receive equal shares.

Per Stirpes Explained

A per stirpes distribution in the context of an estate is when a beneficiary’s share passes to the person’s successors if the beneficiary passes away before inheritance. Instead of naming exclusively specific people to inherit property, per stirpes essentially names a class (children or grandchildren) of beneficiaries to receive property possessions.

The descent problems do not arise when the law recognizes only one heir. Instead, the problem arises when there are two or more heirs to descend. It also arises when the principle of representation does not come into recognition; the heir has died before writing the will. In such cases, the lineal descendants of that deceased heir take their place.

The decedent’s descendants (persons who died) will be the rightful owners of parts of the property not passed to the decedent’s surviving spouse. The property is, therefore, divided into shares among the decedent’s descendants (the children) in the system’s most refined form. Then, the shares will be further divided amongst the second generation (grandchildren of the descendants).

Deceased children who do not have any living descendants generally have no part in the determination of primary shares. However, if the descendant has no living children, the descendant’s grandchildren at the next generation (child generation) level get to share the primary share.

Estate distribution gets easier and faster by including this distribution system. This saves time by not having to name secondary beneficiaries in every situation. In addition, if one of the individual’s primary beneficiaries passes away before them, it ensures explicit instructions for who should inherit that property.

Examples

Check out these examples to get a better idea of per stirpes.

Example #1

Dave has three children: Ann, Dan, and John. He wants to split his properties and belongings equally amongst his children. Unfortunately, Ann, who has four children of her own (and thus becomes Dave’s granddaughter), dies before Dave. The property was supposed to be divided into three parts, and Dave’s children would receive one or 1/3rd of the share.

However, since Ann is dead, her four children (per stirpes beneficiary) will receive the share while Dan and John will receive their 1/3rd share. This example explains that the inheritance will be passed on until the property is fully shared with the recipients.

Example #2

Suppose Tina has three daughters alive at his death, with five, four, and three children each. After Tina’s death, the property and belongings go to her three children, not her grandchildren. Here, all Tina’s children are alive and therefore are entitled to per stirpes distribution of an equal share of 1/3rd.

Per Stirpes vs Per Capita

Per Stirpes and per capita are two types of stipulations related to the distribution of property and are closely associated with each other. However, they have some fundamental differences, such as:

1. Meaning

Per Stirpes is an inheritance system that allows inheritance to the next generation if the beneficiary is dead. On the other hand, in the per capita system, each designated beneficiary receives a share of inheritance only if they are alive.

2. Representation

Per Stirpes uses representation. This means the descendants or relatives take after their parents or ancestors and represent them. Hence they will be the per stirpes beneficiary. In per capita, children or other family members take it directly in their own right and not on behalf of anyone else.

3. Inclusion

Per Stirpes is especially helpful when the individual is part of a large family. The law only recognizes biological or adopted children; stepchildren are left out. Therefore only a biological child can receive assets under a per stirpes distribution. Per capita distribution ensures that only the individual’s desired beneficiaries will get a share of the individual’s estate. On the other hand, the next generations automatically become its beneficiaries.

4. Complications

Suppose the per capita distribution option is chosen, and children and grandchildren are designed as beneficiaries. In that case, there is a chance that if one of the children passes away before the individual does, a generation-skipping transfer tax will be triggered. Per stirpes distribution has no such complications.

5. Convenience

PC needs to be updated in the event of a new generation of beneficiaries. For example, the inherence plan has to be changed when a beneficiary dies, or a new family member is born. In per stirpes, however, it does not need such updating.

Here, the Per se method shows that even if one generation is deceased, the next generation receives the inheritance. But per capita, it is already determined who gets the inheritance and their share. In the diagram, the first generation is ignored by the will; therefore, the second generation receives it.