In this article we will explain what is per stirpes in estate planning. Per stirpes is a legal term used in estate planning to explain who will inherit your assets if one of your beneficiaries passes away before you. This term helps you streamline the decision of who should be the back-up beneficiary for each of your assets and ensures that there are clear instructions for who should inherit your property.
So What is ‘Per Stirpes’ Definition in Estate Planning?
Per stirpes is a Latin term used to describe a type of distribution of assets. If one of your beneficiaries (heirs) dies before you, their share of your estate will pass to their descendants. The term “by right of representation” is also used interchangeably with per stirpes and means the same thing.
Why Use Per Stirpes Distribution in a Will?
Using per stirpes distribution in your will can save you time and simplify your estate planning. By using per stirpes, you don’t have to name contingent beneficiaries for every possible scenario. It also ensures that there are clear instructions for who should inherit your property, even if one of your primary beneficiaries passes away before you.
When Shouldn’t You Use Per Stirpes Distribution?
There may be some instances where per stirpes distribution isn’t the best option for you. You may want to use another option if:
- You’d rather distribute your estate among only your remaining living beneficiaries (known as a “per capita” distribution).
- You want to name a completely new beneficiary if one of your primary beneficiaries passes away before you (secondary beneficiary known as a contingent beneficiary).
- You’re part of a blended family. By law, only your biological or adopted children are legally considered your children and stepchildren are not.
- You think someone will contest your will.
How to Use Per Stirpes Distribution in a Will
To use per stirpes distribution in your will, list each primary beneficiary’s full legal name and the property you want them to inherit. Then, include a line stating who you want to receive the assets if your beneficiary passes away before you. For example, “I give to my son, Alan John Smith, one-third of my estate. If Alan John Smith does not survive me, this inheritance should be distributed to Alan John Smith’s descendants, per stirpes.”
Examples of Per Stirpes Distribution
- Roger has three children, Michael, Amy, and Maria. Roger passes away, and all three of his children are still living. Because of his per stirpes distribution in Roger’s will, each of his children will receive one-third of his estate. Of Roger’s $3 million estate, Michael, Amy, and Maria will each receive $1 million.
- Roger has three children, Michael, Amy, and Maria. Roger passes away, but his daughter, Maria passed away a year before, leaving behind two children (Roger’s grandchildren). Michael and Amy will each receive one-third of Roger’s estate, and Maria’s children will each receive one-half of Maria’s share. Of Roger’s $3 million estate, Michael and Amy will each receive $1 million, and Maria’s children will each receive $500,000.
- Roger has three children, Michael, Amy, and Maria. Roger passes away, but his daughter, Maria passed away a year before. Maria had no children. Maria’s share will remain in the pot, to be divided equally between Michael and Amy. This means that Michael and Amy will each receive one-half of Roger’s estate. Of Roger’s $3 million estate, Michael and Amy will each receive $1.5 million.
Conclusion
It is very important to understand what is per stirpes definition in estate planning. Per stirpes distribution is a quick and simple way to name contingent beneficiaries for your property. It ensures that there are clear instructions for who should inherit your assets, even if one of your primary beneficiaries passes away before you. However, it’s important to understand when per stirpes distribution may not be the best option for you. If you’re not sure, consider consulting with an attorney.
