Sometimes we like to add a little Latin to a legal document. Good examples are “per stirpes” or “per capita” that are stated after the name of a person or group of people, such as to my children, per stirpes or to my children, per capita. These words are shorthand ways to define how would pass assets at the time of death. One little word make a big difference, so which one is right for you?
Per stirpes means by representation or by right of representation while per capita means according to the numbers. These concepts are better explained with examples:
Assume Fred is single and has two children, one boy and one girl. His son, Bill, has three children, and his daughter, Sally, has two children. Fred decides to leave his assets to his two children, per stirpes. This would mean that each child would receive one-half of Fred’s assets at death. If his son, Bill, predeceases Fred, then Bill’s children would take Bill’s one-half of Fred’s estate equally (each of Bill’s children would receive one-sixth of the estate).
Let’s instead assume that Fred wishes to leave his assets to his children, per capita. This would mean that each child would receivce one-half of Fred’s assets at death. If his Bill, predeceases Fred, ALL of Fred’s assets would pass to his daughter, Sally. In other words, Bill’s family would receive nothing.
It might be easy to say I will choose “per capita” because I have young children and no grandchildren. When my children grow up and have families of their own, I will change my Will. That’s fine, but we find in our practice that clients do not want to talk about their estate plans very often. In fact, we review plans that are fifteen or twenty years old on a regular basis. So, if you are inclined to think down the road when you might have grandchildren, maybe “per stirpes” makes sense. If your children predecease you without children of their own, your assets will pass to your surviving children.