What Is Per Stirpes?

What Is Per Stirpes?

Per stirpes is a legal term I often see in estate planning, like in wills. It tells you who gets a beneficiary's share of an estate or asset if that beneficiary dies before the testator—the person who made the will.

In Latin, per stirpes means 'by branch' or 'by roots.' When you use it in a will, it means the beneficiary's portion goes to their descendants or heirs. You can also apply per stirpes to beneficiaries in an individual retirement account (IRA).

Key Takeaways

Children, and sometimes grandchildren, are typically the ones who benefit from a per stirpes distribution because they're direct descendants. Remember, per stirpes focuses on direct descendants and doesn't include spouses. If you want something different, you could use per capita instead, which splits the inheritance evenly among the heirs if one predeceases the testator.

How Per Stirpes Works

You use per stirpes in wills and retirement accounts to make sure assets flow through the branches of your family tree as the testator or account holder intended. It covers everyone down the line from a single person, like children, grandchildren, and great-grandchildren of a parent.

Per stirpes steps in when there's an 'out of order' death—meaning the beneficiary dies before the person they're inheriting from. In that case, the beneficiary's descendants split that portion equally.

Take this example: if you have two children, each with two kids, and one child dies before you, per stirpes means your estate splits into two parts—one goes fully to the living child, and the other gets divided evenly between the deceased child's two kids. Spouses don't factor into this.

When you write it, it's usually 'to [person's] descendants, per stirpes.' The 'person' should be an individual, not a group, and you need words like 'descendants' or 'issue.' If it's your own descendants, you'd say 'to my descendants, per stirpes.' You can also name a non-descendant beneficiary and specify their descendants inherit per stirpes.

Important Note

Different places might define 'per stirpes' a bit differently. To keep things clear and ensure your documents match what you want, work with a lawyer who knows the local laws and definitions.

Per Stirpes vs. Per Capita

If you leave something per stirpes, and the beneficiary dies before you, their share gets split equally among their heirs. The alternative is per capita, which means 'by the heads,' where assets divide equally among your surviving beneficiaries.

With per capita, if a beneficiary predeceases you, their share goes back to the estate and gets split among the ones still alive. For instance, with two children each having two kids, if one child dies first, per capita would divide your estate into three equal parts: one for the surviving child and one each for the deceased child's kids.

Neither one is better—they depend on your family setup and how you want assets divided after you're gone.

Example of Per Stirpes

Let's look at a four-generation family. Maria has two children, Flora and Shauna. Flora has two kids, Stephanie and Robert. Shauna has one child, River, and two grandchildren, Bruno and Sofia. Maria's will says her children inherit per stirpes, each getting half.

If Maria dies and both children are alive, the estate splits evenly between Flora and Shauna—grandkids and great-grandkids get nothing.

If Flora dies before Maria, Shauna gets half, and the other half splits between Stephanie and Robert. River, Bruno, and Sofia get zilch.

If Flora lives but Shauna and River both die before Maria, the estate divides in two: half to Flora, and the other half split between Bruno and Sofia. Stephanie and Robert don't inherit.

The Bottom Line

Making a will can be tough, but you need to specify how your assets get divided after you die. Without one, state laws where you live take over.

Terms like per stirpes can confuse things, and a mistake in your will might cause problems for your heirs. To prevent that, team up with an estate planner who knows your state's laws to craft a will that truly reflects what you want.