Per stirpes
A way of dividing an inheritance so that if a beneficiary has died, their share passes down to their own children rather than to the other beneficiaries.
What it means
Per stirpes means by the branch. The estate is divided at the level of the named beneficiaries, and a deceased beneficiary's branch takes their share among themselves.
It is the assumption most people have when they name their children, and it is not always what a form does by default.
The alternative, per capita, divides among the survivors so that a deceased beneficiary's children receive nothing.
Why it matters
It decides whether grandchildren inherit when their parent has died first, which is the single most consequential thing a beneficiary form does and the thing least often read.
Institutions differ in their defaults, so the same wish expressed on two forms can produce two different outcomes.
When you are likely to meet it
- When completing a beneficiary designation.
- When a beneficiary died before the account holder.
- When reading how a will divides the residue.
For example
A woman names her three children. One dies before her, leaving two children of his own. Per stirpes, his two children share his third. Per capita, the two surviving children take half each and the grandchildren receive nothing.
Per stirpes and per capita
The same family, the same death, two words on a form, and a materially different answer. Both are ordinary choices on a beneficiary designation and most people tick one without being told what it does.
| What is being compared | Per stirpes | Per capita |
|---|---|---|
| The idea | A share follows the branch of the family | Everybody at the same level shares equally |
| If a child dies before the parent | That child's share passes to that child's own children | That child's share is redistributed among the surviving children |
| Grandchildren whose parent is alive | Take nothing | Take nothing |
| Three children, one predeceased leaving two children of their own | Each surviving child takes a third; the two grandchildren split the remaining third | Each surviving child takes a half; the grandchildren take nothing |
| Usually chosen by somebody who wants | A branch of the family to keep its share whatever happens | The people actually alive at the death to share equally |
| Where the word appears | Wills, trusts, and most beneficiary forms | Wills, trusts, and most beneficiary forms |
"Per capita at each generation" is a third arrangement, distinct from both, which pools each generation's shares and divides them equally among that generation. Where a form offers it, it is not a synonym for either column.
How this varies by state
States differ over the generation at which the division starts, so the same phrase in a will can produce different shares depending on where it is read.