By Scott Hamilton, CFP®
One of the most important aspects of estate planning is knowing how your assets are distributed after your death. Being aware of the answer to questions like “What is per stirpes?” may seem trivial, but understanding what it means is essential for feeling confident about your legacy.
Today I discuss specific information about per stirpes, explaining how it works and providing real-world examples to illustrate how it’s applied. I also explore the different ways per stirpes can be used, contrasting it with other distribution strategies such as “per capita,” and highlighting the importance of including explicit per stirpes language into your will or trust.
Table of Contents
Definition of Per Stirpes
The Latin phrase per stirpes, which translates to “by roots,” refers to an inheritance distribution system that emphasizes family lines.
It determines the distribution of your assets among your beneficiaries, especially in cases where some of your designated beneficiaries pass away before you do. Without a clear understanding of per stirpes, you could inadvertently disinherit family branches—which could lead to family conflict.
Unlike per capita distribution, which divides inheritance equally among living recipients regardless of their generational tie to the deceased, per stirpes distribution maintains inheritance within family lines.
How Per Stirpes Works
Knowing how per stirpes is used in real-life situations is essential to understanding how it affects the distribution of inheritance. The following two examples show how assets are distributed among beneficiaries when some of those beneficiaries have outlived the testator.
Example 1: Straightforward Family Structure
John, who has three children, specifies that his fortune is distributed per stirpes. If one of his children, Sarah, dies before him, Sarah’s share goes to her two children (John’s grandchildren). In this scenario, Sarah’s children continue to receive their mother’s share of John’s estate after she’s gone. This confirms that her branch of the family still receives her portion.
Example 2: Complex Family Structure
Mary, a grandmother with two children, identifies her estate per stirpes. Lisa, her daughter, is childless, but David, her son, has three children. David’s share is divided equally among his three children if he dies before Mary. Because she is still living, Lisa continues to receive her full half of the estate.
Common Misconceptions About Per Stirpes
It’s a common misconception that simply stating “my descendants” in a will entails naming all surviving relatives, regardless of how distant they are. Not true.
Clearly expressing your wishes in your trust or will with precise per stirpes language is essential for distributing your assets according to your wishes, and reducing the possibility of family conflict. It is crucial to use clear and exact vocabulary in your estate planning contracts because vague language or presumptions about inheritance can have unexpected repercussions.
Why Per Stirpes Matters
More than just a legal term, per stirpes is also a critical tool for guiding families—both emotionally and financially—toward the outcome the deceased intended. Here are some advantages:
- Verifies equitable distribution aligned with family structure: By eliminating unintentional disinheritance of family branches and reflecting your wishes regarding how your legacy should be passed down, per stirpes confirms that inheritance is allocated equitably throughout family lines.
- Avoids potential disputes among heirs: Per stirpes reduces the possibility of misunderstandings and disputes among your beneficiaries by outlining exactly how your assets should be split. This strategy reduces the possibility of costly and emotionally draining legal disputes.
- Safeguards the intent of the estate owner, especially in multigenerational planning: In complicated family circumstances with several generations, stepchildren, or adoptive children, using per stirpes terminology is critical. Even in the event of unanticipated circumstances, such as a beneficiary passing away before you, it affirms that your assets are dispersed according to your intentions.
Practical Considerations
Lastly, let’s take a look at the practical considerations of per stirpes, including guidance on effectively incorporating it into your estate-planning strategies.
- Other options: Per stirpes is typically the appropriate choice when you wish to maintain inheritance within family branches. Other approaches, such as per capita, may be better for distributing money equally to certain people, regardless of ancestry.
- Upkeep: Careful and regular review of your estate documents, including per stirpes designations, is essential to confirm they continue to reflect your wishes as life circumstances evolve.
- Ongoing awareness: To feel confident your estate plan always represents your intentions and reduces the likelihood of future issues or family disagreements, it’s essential to stay up to date on the practical considerations of per stirpes.
Partner With a Professional
Collaborating with a financial advisor to align your financial strategies with beneficiary designations is a smart way to confirm your wishes are met.
At Hamilton Financial Planning, we will work with your estate planning attorney to design an estate plan that prevents future family tension, specifies your wishes, and aligns precisely with your individual financial situation.
If you’d like guidance in estate planning—or any financial assistance—please reach out! Schedule a complimentary get-acquainted meeting online or reach out to us at 512-261-0808 or scott@hamiltonfinancialplanning.com.
About Scott
Scott Hamilton is founder and chief financial officer at Hamilton Financial Planning, a wealth management firm that specializes in providing comprehensive financial planning for retirees. With over 20 years of experience in the financial industry, and having completed over 250 financial plans for retirees across all industries, but mostly the oil and gas industry, Scott is passionate about providing his clients with the tools and insight they need to achieve their financial goals. He has a Bachelor of Business Administration in finance from Texas State University and an MBA in international finance from Pepperdine University. Scott has also been happily married to his wife, Gayle, for over 25 years. To learn more about Scott, connect with him on LinkedIn.
