When reviewing your estate planning documents or beneficiary designations, you may have come across the term “per stirpes.” While it may sound complicated, it is an important estate planning concept that determines how your assets are distributed if a beneficiary passes away before you.
Per stirpes is a Latin term meaning “by branch.” In estate planning, it means that if a beneficiary passes away before you, that beneficiary’s share will instead pass to their descendants.
For example, imagine you have three children: John, Jane, and Jack. Your estate plan provides that your assets will be distributed equally among your children, per stirpes. However, John passes away before you, leaving two children of his own.
Upon your death, Jane and Jack would each receive one-third (1/3) of your estate, while John’s two children would each receive one-sixth (1/6), collectively inheriting the one-third (1/3) share that John would have received. Without a per stirpes designation, John’s children may not automatically inherit his share.
The primary benefit of per stirpes distributions is ensuring that a deceased beneficiary’s share passes to their descendants, in equal shares, rather than being redistributed among the other surviving named beneficiaries.