Two terms that often come up in estate planning are “per stirpes” and “per capita.” Both terms describe methods that people use to divide an estate or trust amongst beneficiaries. But the terms have different meanings. This article defines these terms and explains the key differences between them.

What is Per Stirpes?

“Per stirpes” is Latin for “by branch.” When assets are divided per stirpes, that means that each branch of the family gets an equal share. For example, if a father has three children and he leaves his assets per stirpes, that means that the assets will be split into thirds so long as there’s at least one living member of each family line. If each child is then living, each child, as the representative for his or her branch of the family, would receive one-third of the assets. If one of the father’s three children (let’s call her “Anne”) predeceased the father, then Anne’s share would pass in equal shares to Anne’s two children. So each of Anne’s children would get one-sixth of the assets. The patriarch’s two surviving children would still get one-third each.

In the United States, per stirpes is the dominant approach and reflects most people’s sense of fairness. It ensures that all of a person’s children are treated the same, rather than rewarding children with larger families or punishing children with smaller families. But some people don’t like the idea of each branch of the family being treated equally. These people argue that, instead, each individual child (or grandchild) should be treated the same as all of the children (or grandchildren). These people may prefer that their assets be divided per capita.

What is Per Capita?

“Per capita” is Latin for “by head.” With a per capita distribution, each living beneficiary who belongs to a particular generation receives the same-sized share of the estate or trust as every other living member of the same generation. But members of lower generations get nothing, unless the grantor provides for those individuals separately. With a per capita division, the focus is on treating members of each generational level equally, not on treating each family line equally. So, for example, if you left your assets to your three children per capita, and one child predeceased you, the assets would pass in equal shares to your two surviving children. Any descendants of the predeceased child would be left out.

Example: Bob Leaves His Assets Per Capita

Imagine that Bob’s last will and testament provides that upon his death, his assets will be divided per capita between his two children, A and B. A has two children of her own, C and D. B doesn’t have any children. A predeceases Bob, but Bob never updates his will. Then, on Bob’s death, B, as Bob’s only surviving child, receives Bob’s entire estate. C and D receive nothing! Maybe this was Bob’s intention, but it seems like a strange result. If Bob had left his assets to his descendants per stirpes, B would have gotten one-half the assets while C and D would have gotten one-quarter each.

Per Stirpes vs. Per Capita: Main Differences

There are a few key differences between per stirpes and per capita:

• Per stirpes divisions treat each family line equally, while per capita divisions treat each member of a particular generation equally.
• The descendants of a predeceased child of the testator or grantor may be better off if the assets are divided per stirpes than per capita. That’s because if the assets are left per capita, and there are surviving members of the generation above those descendants (like surviving children), the surviving descendants of the predeceased child will receive nothing.
• Per stirpes is often used in cases where there are many different people who will be getting money from the estate or trust, while per capita is more often used when there are fewer beneficiaries. Overall, per stirpes is more commonly used.

Which is Better?

There are a lot of things to consider before deciding how to divide an estate or trust. It is up to you to decide which method of division strikes you as the most fair. If the language is going to be included in a will or revocable living trust, remember that you can change the method of division in the future.

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