When it comes to estate planning, it can get confusing, especially when it comes to who inherits what and the distribution of the assets. Two common methods for distributing assets to beneficiaries are per capita and per stirpes. Each method has its own meanings and can significantly impact how assets are distributed after a beneficiary’s death.
Per capita distribution, also referred to as “by the head,” divides assets equally among living beneficiaries. If a beneficiary dies before the estate owner, their share is redistributed equally among the remaining living beneficiaries. This method ensures that each beneficiary receives an equal share of the estate, regardless of their relationship to the deceased beneficiary. While per capita distribution can make the distribution process easy, it may not fit with your intentions if you want your assets to be distributed to a specific loved one.
On the other hand, per stirpes distribution, or “by the branch,” distributes assets based on family lines. If a beneficiary dies before the estate owner, their share is passed down to their children, rather than being redistributed among the remaining beneficiaries. This method allows you to ensure that your assets remain within your family lineage, passing down to your grandchildren or other descendants if your intended beneficiary predeceases you. Per stirpes distribution is particularly useful for individuals who want to preserve assets for future generations or ensure that specific family members receive their intended inheritance.
Choosing between per capita and per stirpes distribution depends on your specific goals. Per capita ensures a larger inheritance for surviving beneficiaries, potentially unintended if you wish to include grandchildren or descendants further down the family line. Per stirpes, on the other hand, guarantees a share for the deceased beneficiary’s descendants, even if it reduces the inheritance for surviving children.
Ultimately, the goal of estate planning is to provide for your loved ones and ensure that your assets are distributed according to your wishes. By understanding the differences between per capita and per stirpes distribution, and by working with experienced professionals like our attorneys at Grissom Law, LLC, you can create an estate plan that protects your family’s future and preserves your legacy. Contact us today to learn more about how we can assist you with your estate planning needs.
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