Estate planning terms can often sound foreign or confusing, especially for those not familiar with legal jargon like executrix. Two common methods used to distribute assets in estate planning are per stirpes and per capita, which can be particularly perplexing. To clarify these terms, we outline what they mean, how and when they are used, and their pros and cons.

Per Stirpes

Definition and Explanation:
Per stirpes, meaning "by branch" in Latin, is a method of distribution where assets are divided equally among the branches of the family. If a beneficiary predeceases the testator (the person who made the will), their share of the inheritance is passed down to their descendants.

Typical Use Cases:
Per stirpes is commonly used when there are surviving descendants of a deceased beneficiary. It ensures that the deceased beneficiary's share of the estate does not lapse but is instead distributed to their heirs.

Example:
Dad dies and had four children; only three survived him. The one who predeceased him had two kids (Dad’s grandkids). Dad’s estate is divided into four equal shares, with his kids each getting ¼ of the estate and the two grandkids splitting the remaining ¼ (each getting ⅛ of the estate).

Pros:

• Ensures equal distribution among branches of the family, potentially reflecting the testator's intent more accurately.
• Prevents the estate from being redistributed among surviving beneficiaries, which could exclude a deceased beneficiary's descendants.

Cons:

• Can result in unequal distributions among individual beneficiaries, especially if one branch of the family has more descendants than another.
• May be more complex to administer, as it requires tracking the family tree to determine eligible descendants.

Per Capita

Definition and Explanation:
Per capita, meaning "by heads" in Latin, distributes an estate equally among all living beneficiaries at the same level of relationship to the testator, regardless of the familial branch.

Typical Use Cases:
Per capita is typically used when the testator wishes to distribute assets equally among all beneficiaries without regard to the family branch. This method is often applied when there are no surviving descendants of a beneficiary.

Example:
Dad dies and had four children; only three survived him. The one who predeceased him had two kids (Dad’s grandkids). Dad’s estate is divided into three equal shares, with his surviving kids each getting ⅓ and the grandchildren of his predeceased child receiving nothing.

Pros:

• Simplicity in administration, as the estate is divided equally among all named beneficiaries at the same generational level.
• Ensures equal distribution among individual beneficiaries, which may be perceived as fairer in some situations.

Cons:

• May not align with the testator's intent if they desired to keep assets within a particular branch of the family.
• Can lead to unintended consequences, such as excluding the descendants of a deceased beneficiary from the inheritance.

Conclusion

The choice between per stirpes and per capita distribution methods can significantly affect how your estate is divided among your heirs. Per stirpes ensures that assets are distributed down family branches, potentially reflecting a desire to keep assets within a particular line. In contrast, per capita divides the estate equally among all beneficiaries at the same level, which may be simpler but could lead to outcomes that do not align with the testator's wishes.

‍