“Per stirpes” – it might sound like a newly discovered exotic plant or a complicated medical term. However, in the realm of estate planning, it is incredibly important. This Latin phrase is the key to ensuring your wishes are carried out, even in the face of life’s unexpected twists and turns.
Essentially, it operates like a safety net within your will. If one of your children passes away before you do, their “branch” of your family does not miss out on their intended inheritance. Their share is passed down to their own children (your grandchildren), ensuring a generational transfer of your assets.
Understanding Per Stirpes with Examples
The concept of “per stirpes” can get a little confusing. Let us break it down with some practical scenarios using Sarah’s will as our reference.
Sarah has three children: Alice, Benjamin, and Olivia. Her will divides her assets equally among them, using a per stirpes distribution. Alice has two children of her own, Max and Lily. The others do not have children.
- Scenario 1: Everyone is alive. If Sarah passes away while Alice, Benjamin, and Olivia are all still living, they each receive a third of her estate. Alice’s children, Max and Lily, do not receive a direct inheritance at this time.
- Scenario 2: Alice passes away. If Alice dies before Sarah, Benjamin and Olivia still receive their thirds of the estate. Alice’s share, however, is split evenly between her children, Max and Lily. They each inherit one-sixth of Sarah’s estate.
- Scenario 3: Benjamin passes away. Now, if Benjamin predeceases Sarah, Alice and Olivia each receive half of Sarah’s estate. Since Benjamin had no children, his share does not have to be divided further. Alice’s children again receive nothing directly.
- Scenario 4: Alice and Max pass away. Lastly, if both Alice and her son Max pass away before Sarah, Benjamin and Olivia each receive one-third of the estate. The remaining third goes to Lily, as Alice’s only surviving heir who inherits her share by representation.
Per Stirpes vs. Per Capita: Understanding the Difference
When it comes to estate planning, you have options beyond just “per stirpes.” The alternative is “per capita,” meaning “by heads.” This method divides your estate equally among living beneficiaries of the same generation, and the shares of those who predecease you generally go back into the main estate.
In scenario 2, if Alice predeceases Sarah, under a per capita distribution Benjamin and Olivia would each receive half the estate. Alice’s children, Max and Lily, would not inherit anything as they are a generation down.
Nevertheless, per stirpes remains the more common choice as it ensures a fairer distribution that reflects how most families envision inheritance.
Jurado & Associates: Your Estate Planning Partners
A knowledgeable attorney can help you strategize, addressing potential complexities like blended families, special needs trusts, and even minimizing taxation. We want your will to be a crystal-clear roadmap, not a source of confusion or conflict down the line.
Here at Jurado & Associates, P.A., we unravel the jargon and make estate planning understandable, even dare we say… enjoyable! We are committed to personalized service because we know every family is unique.
Securing your family’s future is an act of love. We can help you craft an estate plan that leaves no room for doubt.
Schedule your consultation today to discuss your goals and design the best estate planning strategy for you.
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