Per Stirpes and Per Capita: Common

Phrases, Commonly Misunderstood

October 18, 2011 Hull & Hull LLP Estate Planning Tags: estate planning 1 Comment

The phrases “per stirpes” and “per capita” are frequently used in wills drafted by lawyers. They refer to the
manner in which property is to be distributed between, or amongst, beneficiaries. Despite their frequent
use, these phrases are commonly misunderstood.

Generally speaking, the phrase “per stirpes” is taken to describe a manner of distribution to issue (i.e. lineal
descendants) where each branch of the family is to receive an equal share of an estate. If a testator divides
the residue of her estate amongst her “issue in equal shares per stirpes” it means that, in the first instance,
the testator’s children will be entitled to the residue of the estate in equal shares; however, if any child has
died leaving children of her own, the children of such predeceased child (the testator’s grandchildren) will
receive the predeceased child’s share, and if any grandchild entitled to such a share has died leaving children
of her own, the children of such predeceased grandchild (the testator’s great grandchildren) would then be
entitled to the predeceased grandchild’s share, and so on.

This method of distribution can be contrasted with a “per capita” distribution. If a testator divides the residue
of her estate amongst “issue alive at my death in equal shares per capita,” then all of the testator’s issue,
including all children, grandchildren, and great grandchildren etc., would receive an equal share. For
example, if a testator is survived by three children, four grandchildren, and one great grandchild, then each
descendant would receive one eighth of the residue of the estate.

Because the phrases “per stirpes” and “per capita” can be misunderstood, some lawyers avoid them all
together and others include a clear definition of the phrases in the will.

Per Stirpes vs. Per Capita

There are two ways to leave your estate to your children; Per Stirpes and Per Capita. Per
Stirpes means that the Grantor intends that the Beneficiary's share of the inheritance will go
to his or her heir. Per Capita indicates that the Grantor intends that NO ONE except the
named beneficiary receive that share of the estate.

If there are two or more primary beneficiaries and each has children, it is important to
specify in the will whether the children of each prime beneficiary are simply to take their
parent's share, divided equally among the children of that particular parent, or whether all
of the children of all of the deceased prime beneficiaries are to share equally in the
combined shares of their deceased parents.

Reviewing examples helps solidify understanding of per stirpes and per capita distribution.

EXAMPLE 1:
Consider an example where you, the Grantor, are not survived by your spouse but you are
survived by two children (named Amy and Bob), and Amy and Bob will each receive 50% of
your estate. Suppose Bob died before you and left a child (named Bob, Jr.). Where should
Bob's 50% of your estate go? To Amy, or to Bob, Jr.?

If you want Bob's share to be inherited by Bob's children, then the share passes per stirpes
(think of it as "down the stripe"). If you want Amy to get the entire estate (thus shutting
out Bob's children), then the estate passes per capita. Per Capita distribution looks at the
number of surviving heads on the generational line.

EXAMPLE 2:

The remainder of the estate is to go to Arnold and Betty in equal shares and, if either or
both die before the testator, then to their children living per stirpes. Arnold and Betty both
die before the Grantor. Arnold has one child, Cindy, and Betty has two children, Debra and
Edward. Cindy gets half of the residue; Debra and Edward each get one quarter under a per
stirpes distribution.

If a per capita distribution were called for, then Cindy, Debra and Edward would each get
one-third.