Should I Use Per Stirpes or Per Capita?
Think about the last time you looked at or signed a legal document. Was it full of words you did not understand? Did some of the words seem like they might even be made up? There are no shortage of these types of terms in the legal field. The estate planning process is no different. Your estate planning attorney should be able to explain any foreign concepts to you and make sure you understand what is going on. Two phrases that often come up in estate planning are “per stirpes” and “per capita.” These two small phrases can have a major impact on how assets are distributed after death. These each represent a different type of distribution style. It is important to understand what each means so that you can choose the right method for your estate.
In Latin, per stirpes means “by the roots.” In estate planning, this type of distribution is all about your family tree and following a distribution pattern according to each “branch” of the tree. Each member of a particular branch of the family tree will receive a proportionate share of the estate. To understand this more, here is an example. A widowed husband without a will has three children. One child is deceased but with two children of his own. The decedent’s estate will be split evenly between his three children. Since one of the children is deceased, that child’s heirs will split his portion evenly. The “roots” in this situation are the three children, with the shares of the estate being split among them.
Per capita is also a Latin word meaning “by the head.” Instead of splitting the shares of an estate among a branch of the family tree, in per capita every living member will receive an equal portion of the estate. Using the same example as above, the two remaining children of the decedent split the estate evenly. The decedent’s grandchildren receive no shares of the estate.
The biggest difference between per capita and per stirpes distribution is that if a member of a group on the family tree is no longer living, their share is not passed on to any of their own heirs. The remaining members of a group receive the entire amount, there is no passing onto the next generation in place of a deceased member.
In California, choosing the way you want your assets to be passed to your heirs can be complicated. Per capita and per stirpes are both viable options that you need to discuss with your estate planning attorney. The estate planning attorney at the Law Offices of Kris Mukherji is here to help you with all of your estate planning needs. We make sure to discuss all of the available options with you so that you can make an informed decision about how you want your assets distributed after death. Estate planning needs to be done early and updated often. Contact us today to get started.