Definition of Per Stirpes?
The meaning of Per stirpes as defined in Latin is to “my roots”, therefore it wholly transfers the benefit to its beneficiaries.
Understanding the per stirpes definition, it states as how your assets will be distributed or transferred in case any beneficiaries pass away. It is concerned with the distribution of property. As, the amount you have left down for a beneficiary, will eventually be transferred to his/her beneficiary or children’s. Per stirpes commonly refers to lower persons in the family.
So, per stirpes is generally used as:
 Living descendants,
 Daughter’s living descendants, etc.
How Per Stirpes Works
Normally, per stirpes meaning is mentioned down within the will or in the company’s assets distribution, defining how the assets and the property will be distributed to the beneficiaries in case the parent passes before the decedent. Though, Spouses are excluded from the per stirpes.
Per Stirpes vs. Per Capita
Per Capita also follows the distribution method, but here the assets or the property is distributed on the basis of per head, which states distribution of equal shares to each member of the same generation.
Example of Per Capita can be stated as: ABC has 3 children’s i.e. child A, child B, and child C. If ABC dies, then his property of $9000 will be distributed on per capita basis as equally to all 3 children’s. i.e. child A will get $3000, child B will get $3000 and child C will also get $3000.
Unlike, in Per Stirpes the distribution method followed is on the basis of the beneficiary, which follows the family tree system of the distribution of property or the assets.
Per Stirpes Example:
XYZ has 3 children namely, X, Y and Z. Whereas, X has 2 children, Y has 1 child, and Z has 3 children. Both X and Z died before their children. XYZ has a property of $900000. So, by the per stripes method of distribution, it will take place as follows:
 X died. So, the beneficiary of X i.e. X1 will receive $150,000. Similarly, X2 will also receive $150,000.
 Y is alive. Therefore, Y will receive $300,000.
 Z died. So, his property will be distributed among his three children or beneficiaries as:
 Z1 will get $1,00,000.
 Z2 will get $1,00,000.
 Z3 will get $1,00,000.
Also Read: A Full Guide On Z Test: Formula & Example
Per Stirpes diagram or Chart Example:
What is a per Stirpes beneficiary designation?
In case the primary beneficiary passes away before you do, then per stirpes beneficiary designation, their share will go indirectly to their successors or their beneficiaries.
For example:
ABC has 3 children A, B and c. and B has 2 children B1 and B2 and B1 has 2 child B11 and B12 and B2 has one child B21. And B1 passes away, then his property will belong to his beneficiaries, i.e. B11 and B12.
Does per stirpes include spouse?
No, per stirpes do not include spouse as it typically follows the family tree method, where the spouse is excluded. As, spouse is indirectly considered as the beneficiary of 50{367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39} of the share that is transferred.
What is modern per stirpes?
As per modern per stirpes the proper is transferred or passed to the descendants of the decedent, who are living.
Considering the example as per stirpes method.
A has beneficiaries as B who has passed away, C who is alive and D who has passed away. B has beneficiaries as B1 and B2 who are living. And D has beneficiary as D1.
So, the per stirpes distribution will take place as: B1 and B2 will get 2/9th of the total share. C will get 1/3rd of the total share and D1 will get 2/9th of the total share.
Considering the example as per capita method.
A has beneficiaries as B who has passed away, C who is alive and D who has passed away. B has beneficiaries as B1 and B2 who are living. And D has beneficiary as D1.
So, the per stirpes distribution will take place as: B1 and B2 will get 1/6th of the total as B share was 1/3 of the total share. C will get his share of 1/3 of the total share and D1 will get D’s share of 1/3 of the total share.
Read Also:What is Put Call Parity? (Full Guide)
Conclusion:
Though, Per Capita method of distribution is more substantial to be used but rarely adopted as people use more of per stirpes method. So, one should carefully plan and choose the distribution method as it has a long term implication in the future. Or else you can plan and decide the same by planning an attorney or adopting other methods to do so. So, as per stripes method there is legal transfer of the property to the successors or the beneficiaries, mentioned or not mentioned in the will of the deceased person.
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