The Difference Between Per Stirpes and Per Capita
If you are in the midst of estate planning or have been researching your options, you likely have come across the terms per stirpes and per capita. These terms are very important as they denote methods by which your estate may be distributed upon your death.
Per stirpes is actually an umbrella term for two different methods of dividing the estate of someone that has died without a valid will – English per stirpes and modern per stirpes. The two differ in that English per stirpes divides the estate at the decedent's first descendant(s), regardless of whether the descendant(s) is living. Modern per stirpes, however, divides the decedent's estate to the nearest living descendant. So, if Allen – who has no will – has two kids, Brad and Charlotte, and Brad has a son, David, and Charlotte has two kids, Ellen and Frank, but Brad and Charlotte die before Allen, how will Allen's estate be divided? Under English per stirpes, Allen's estate would be split 50/50 at the level of Brad and Charlotte. Brad's son, David, takes Brad's one-half of the estate, and Charlotte's kids split her half (one quarter to each) between them. Under modern per stirpes, David, Ellen, and Frank each get one-third, since they are the nearest living descendant.
The per capita method of distribution is more complex than the two mentioned above. With per capita, the decedent's estate is divided at the first level in which there's a living descendant, with the remainder getting lumped together and dropped down to the next level of living descendants, where it is then split equally. So, if Allen, from the example above, would have had three kids, and two of them had died before him, his still-living child would receive one-third. The other two-thirds would be lumped together and divided equally among the descendants of Allen's other two children.
These methods of distribution can be confusing, and not all states use these methods.
If you have questions about per capita and per stirpes, or other estate planning issues, then please call us for a free initial consultation. We at the Mendel Law Firm can help you uncover your options and choose the strategy that is best for you.