Takeaways

  • “Per stirpes” and “per capita” are terms used in estate planning that refer to the distribution method for the assets of a deceased person to their heirs.
  • The distinction can significantly affect how assets are shared among family members. When deciding which distribution method to use, consider your family dynamics and the potential for any future disputes.

A Will Is Part of Your Estate Plan

Creating an estate plan is essential for ensuring that your wishes are honored regarding who inherits your money and property and that your loved ones are taken care of after you’re gone. It can also help reduce stress and confusion among your family members during a difficult time.

A last will and testament, often simply called a will, is a key legal document in your estate plan. When you create a will with an estate planning attorney, one main decision to make is how you would like your assets to be distributed to your heirs after you pass away. Two commonly used terms regarding this issue are “per stirpes” and “per capita”. They are important for you to know to understand what your will says as regards beneficiaries who inherit after you and your spouse pass away. 

Per Stirpes

Distributing your assets per stirpes (sometimes called “by right of representation”) means that your money and property will be divided evenly among your children. However, if a child of yours predeceases you, that child’s children (your grandchildren) will inherit their parent’s share.

For example, Connie has three children: Cara, Russ, and Susan. When Connie dies, Cara, Russ, and Susan each inherit a one-third share of Connie’s estate. However, if Susan dies before Connie, Susan’s two children, Gabby and Austin, will inherit Susan’s one-third share. The distribution would be as follows: one-third to Cara, one-third to Russ, one-sixth to Gabby, and one-sixth to Austin.

If Cara also dies before her mother, Connie, and Cara has no descendants – children, grandchildren, great grandchildren, etc., Cara’s one-third share is divided equally among Russ, Connie’s surviving child, and the other half in equal shares to Susan’s children Gabby and Austin. 

Per Capita

On the other hand, per capita means that the inheritance is divided equally among all surviving heirs at the same level. For example, Connie’s will might read: “I leave my entire estate to my children, per capita.”

When Connie distributes her assets this way and her daughter Susan predeceases her, Connie’s living children will inherit equally. This would leave Cara and Russ to inherit an equal share of Connie’s estate. Connie’s grandchildren would not inherit anything directly from Connie.

Connie might have instead chosen to leave her entire estate to her descendants, per capita. In that case, if Susan had predeceased her, her grandchildren Gabby and Austin would inherit a share of the estate equal to that of Connie’s children Cara and Russ. The distribution would be: one-fourth to Cara, one-fourth to Russ, one-fourth to Gabby, and one-fourth to Austin.

Work With Your Estate Planning Attorney

These terms can make a big difference in how an estate is distributed, and states have differences in how they interpret these and other terms. So, if you move from out-of-state to Pennsylvania, or if you move from Pennsylvania to another state, be sure to have your will reviewed by an attorney in the state where you presently reside. 

Working with your estate planning attorney is crucial for ensuring that your wishes are clear and legally binding. These professionals understand the complexities of estate laws, which, as noted above, can vary significantly from state to state. They can help you navigate potential pitfalls, such as tax implications and disputes among heirs.

The lawyers at Vasiliadis Pappas Associates have assisted many families in drafting essential documents, such as wills and trusts, and can help you ensure that these documents reflect your intentions accurately. By collaborating with us you can create a comprehensive plan that protects your assets and provides peace of mind for you and your loved ones, ensuring your legacy is honored as you envisioned.

For help creating or reviewing your will, contact Vasiliadis Pappas Associates.