Per Stirpes vs Per Capita – How are they different from each other?

It’s challenging to comprehend the legal terms first when you begin learning about judicial proceed and setting up an estate or trust. There may be even difficult legal jargons that will put you into conundrums. You might get into a situation where you were planning to consider one thing and it came out to be another. This is why you need to be aware of the legal terms that may put you in trouble. One of these terms includes Per stirpes vs per capita which directly relates to the process of how your assets and estate are going to be distributed.

In order to know everything about the difference between per stirpes and per capita, you need to keep reading the article. This is because mixing them together will bring out something that you never wished for.

How to describe Per Stirpes in a Will?

In a simpler way, Per stirpes is a legal terminology used to stipulate what should be done if a primary beneficiary of your will passes before you.

When this happens through per stirpes, the number of assets designated for the deceased beneficiary will be transferred to his heir(s) who are listed under contingent beneficiaries. A category in per stirpes in a will that states contingent beneficiary. According to this, after the primary beneficiary, the estate will directly go to the contingent beneficiary.

There’s not much difference between per stirpes vs contingent beneficiary. Let’s configure it by an example:

For instance, a grandmother (grantor) selects per stripes while making a will. But before her, the primary beneficiary (her son) passes away; this will automatically grant the rights to the granddaughter to be the contingent beneficiary. The granddaughter would receive the inherited estate, even if she was not mentioned in the contingent category as per stirpes automatically transfer the estate to the closest kin to the deceased beneficiary.

Per Stirpes Advantages for Beneficiaries

Per Stirpes for beneficiaries means that the heirs of the beneficiaries will receive the inherited assets on his behalf. But only in cases where a grantor (creator of the Will ) lives and the beneficiary would pass away.

The heirs (contingent beneficiaries) are the closest relation of the beneficiaries such as children or a spouse. These relations must be the nearest ones in the family tree that can claim the inheritance. If you were in the line with the beneficiaries to receive the inheritance but you passed away before, then your children will be the next legal heirs. By applying per stirpes to a Will, it will bring a sense of security that you’re leaving an inheritance for your loved ones.

How to describe Per Capita in a Will?

The process in which the beneficiary passes away before the grantor and the estate is distributed evenly among the remaining designated beneficiaries is referred to as the per capita process in a Will.

To make it comprehensible, let’s take a real-life example.

You have two kids Amanda and Benjamin. You create a Will and add Per capita instructions in your Will that after you, your assets will be equally distributed to both of your children mentioned as beneficiaries.

Days passed and unfortunately, you lost Benjamin in an accident, So according to your per capita instructions, the estate will wholly be named after Amanda.

What does Per Capita hold for Beneficiaries?

If your father or your close relative has mentioned you as a beneficiary in his or her Will then, this means that you may have more than your actual share from the inheritance. But this only depends if one of your fellow beneficiaries would pass away before the distribution of the assets (in the event when the grantor passes away).

The share of the assets will be distributed to the surviving beneficiaries but not to the beneficiary’s heirs. In cases, you are the only surviving beneficiary left (as Amanda in the above example) then you will inherit the estate and assets in full.

If you are planning to make a Will for a fair distribution you will want to know which is better per stirpes or per capita. For this, see the next part of the article.

What is the difference between Per Stirpes and Per capita?

To know which is better among both, you must know that these are different stipulations that will be beneficial in different kinds of situations that may occur in the future that you may not know. But the distribution of your assets will be changed depending on what option you choose to add to your will.

It is also important to know that whatever you choose, the action would only take place once one of your beneficiaries passes away before the estate distribution or the death of the grantor occurs.

Per stirpes will transfer the estate and assets to the surviving heir(s) of the deceased beneficiary also known as contingent beneficiaries.

While per capita, the estate will be distributed evenly among the surviving beneficiaries.

To remember the contradiction between per stirpes vs per capita easily is to know their Latin origin – by branch and by head for per stirpes and per capita respectively.

Ending Note

There would be a huge difference between per stirpes vs per capita. You need to pay attention while making your will when there is more than one beneficiary of your estate.

Avoid getting the legal terminologies mixed with each other to prevent yourself from getting into situations where you find it tricky to get over as both the terms can bring a completely different result.

Work with an estate attorney to eliminate any confusion regarding estate planning, making a Will, or listing down the beneficiaries (either primary or contingent).

Create a list of assets you want to inherit, list down the primary and contingent beneficiaries, dates of adding the beneficiaries, and the per stirpes or per capita instructions to create a will.

Draft a copy first to avoid confusion and to avoid any legal remedy. Your estate attorney will help you craft a comprehensive Will for your beneficiaries that would benefit everyone. Keep updating your will if a beneficiary passes away and provide the updated information.

It is important to keep your Will updated with the dates and the beneficiaries’ designation.

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