You have multiple children and grandchildren (or hope to have grandchildren one day). You want to make sure that the wealth you’ve worked hard to accumulate is handed down to them equally. Two terms with which you should become familiar are “per stirpes” (which means “by branch”) and “per capita” (which means “by head”).
If you use your will to designate how your assets will be handed down to your children and descendants, you’ll likely use one or the other of these terms to designate what will happen if one of your children predeceases you.
No one wants to consider that possibility. However, estate planning is about preparing for every eventuality – even the ones we don’t want to think about. This can help prevent one tragedy from having even more repercussions.
This is the more common of the two choices. Say that you have three adult children, and you want them to inherit the same amount of your estate. If you choose the per stirpes method, you’ll state that your assets will go in an equal amount “to my descendants, per stirpes.”
If one of your children dies before you do, their children (that “branch” of your family tree) will automatically be next in line to receive their parent’s share of the estate, which will be divided equally among them. Your other two children’s inheritances won’t change.
Say you use the per capita method. In the example above, if one of your children predeceases you, your other two children would automatically now split the amount you designated for your children between the two of them. The children of the deceased child wouldn’t stand to inherit anything from your estate.
Of course, a person could always make changes to their estate plan to ensure that their grandchildren weren’t left out. However, by using the per stirpes method, that would happen without any modifications to the estate plan.
Of course, every estate plan, like every family, is unique. Many people don’t leave equal amounts to their children for a host of reasons. Some leave all their wealth to charitable organizations because they believe they’ve given their children everything they need while they’re alive. Whatever your goals are, with experienced legal guidance, you can carry them out.