When you are creating your estate plan, it is important to look beyond your primary beneficiaries and consider what happens to their inheritance if they precede you in death. If you add a per stirpes distribution to your will, the beneficiary's share of your assets will pass to their direct descendants if they die before you.
Per stirpes translates from Latin to “by branch” or “by root.” When placed in a will, it refers to a family tree. If a beneficiary dies, the next line of heirs in their family line will get their inheritance upon the grantor’s death. This includes children and grandchildren. It only applies to blood-related relatives or legally adopted children.
There is another option you can add to a will if you don’t want a beneficiary's inheritance to pass to their heirs if they precede you in death. A per capita distribution means that instead of being passed to descendants, the beneficiary's inheritance will be split evenly between the remaining beneficiaries. If there are multiple generations named in the will, the inheritance passes to the line closest to the estate holder.
In a per capita, if you, as the grantor of the will, have three children who each have one child, the estate splits the deceased beneficiaries' inheritance between your two living children. In per stirpes, the inheritance would pass to the child of the deceased heir, not to your other children listed as beneficiaries.
The definition of descendant, or heir, in terms of per stirpes is children and grandchildren. For example, if a beneficiary passes away and they have three children, the estate divides the inheritance three ways. If the beneficiary that dies does not have a lineal family member, it will not go to another relative like a sibling, parent, or spouse.
If the deceased beneficiary doesn’t have a direct descendant and there is per stirpes in the will, the named assets are split between the remaining living beneficiaries when the grantor dies.
Creating a comprehensive estate plan is complex. To ensure the executor distributes your assets exactly as you wish after your death, it is essential to work with a lawyer or experienced estate planner. Different states and jurisdictions have different legal requirements, and a professional can help you navigate the process.