Per stirpes and Per Capita: How Heirs Inherit

 

If someone dies intestate (without a will), the default rule is that their heirs or relatives inherit per stirpes.  It is a pretty archaic way of distributed property that dates back to medieval England.  For some reason, Florida law still uses it as the default rule and many attorneys chose to use this standard in their wills and trusts, but we usually encourage the use of something called per capita at each generation.

Why?  It is more fair and usually accomplishes what the client wants to happen more than the default per stripes standard.  Let’s take a look at an example.  Mom has two children, son and daughter, who both predeceased her.  Son has four living children and Daughter has one living child.

Screenshot 2018-11-15 10.50.47

Under the per stirpes standard, which is the default in Florida, Daughter’s Child receives 50% of mom’s estate and each of Son’s children receives 12.5%.  Does Mom/Grandma love each of Son’s children 37.5% less than Daughter’s child?  Probably not.

If we use per capita at each generation, each grandchild inherits an equal 20% of Mom/Grandma’s estate.

Take a look at your estate planning documents.  At least half of the wills and trusts we review use the per stirpes standard.  In the example above, this often results in a result the client doesn’t want and can lead to familial grudges and squabbles after she passes away.

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