“Per stirpes” is a Latin term, as are many legal terms. It means “by roots or representation.” Legally, per stirpes is used in wills or trusts to explain who will receive the deceased person’s will’s assets if one of the beneficiaries dies before the person who is the person with the assets. Generally, per stirpes dictates that the named beneficiaries will receive equal portions.

Why Would You Need Per Stirpes in a Will or Trust?

Wills or Trusts that don’t have a per stirpes clause are called per capita. That means if one of the beneficiaries dies and the will or trust isn’t changed to reflect that, and there’s no per stirpes clause, the estate will only go to the named beneficiaries, not any next of kin for the deceased person.

For example, let’s there are three children in a family. The father is a widower whose will says his three children will each receive one-third of the estate. However, he didn’t include a per stirpes clause. One of the beneficiaries dies before the father does, but he doesn’t amend the will, possibly because he didn’t understand that the remaining grandchildren will no longer benefit. The lack of the per stirpes clause requires that the estate be divided equally between the two survivors. The deceased child may have had their own children, but without the per stirpes, they’ll likely receive nothing . With per stirpes, the estate would be divided again into thirds, with one-third going to the grandchildren of the deceased offspring.

What Are the Disadvantages of a Per Stirpes?

There aren’t many. But if per stirpes puts money into the hands of a minor grandchild, it’s possible that the surviving in-law parent would be in charge of that money. That could go against the grandparent’s wishes, especially if there is tension between them or concerns that the in-law will not protect the funds for the grandchild but use them for their own purposes. Proper planning would involve holding this share in trust for the minor grandchild.

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If you or someone you know wants to investigate setting up a will or other aspects of estate planning, call me at 770-889-3911.