what does per stirpes and per capita mean, and why do I care?
What in the heck does per stirpes and per capita mean? In legal documents you will occasionally come across Latin phrases. While the practice of law is generally pulling away from dense, “legalese” type writing towards simpler language, there are some holdovers.
This is because some Latin phrases are terms of art. A term of art is basically industry-specific vocabulary. You will see this is in many other industries, not just law. Words can have significantly different meaning if a chemist is using them versus a manufacturer versus a doctor.
A term of art is essentially a short-hand way of explaining a concept that is known and accepted among people who work in that field.
Let’s Start with Definitions
Cornell Law School’s Legal Information Institute has a really helpful public website where codes are published with legal definitions. Their site explains here that per stirpes is Latin for “by roots” or “by branch”. “Per capita” is Latin for “by head”. Doesn’t seem to make a lot of sense just based on this alone but let’s talk about what this means among lawyers.
What Are These Phrases Shorthand For?
When a will says, “I leave $3 million to my children, per stirpes” what that translates to in plain English is, “I leave $3 million to my children, and if any of my children die before me, their children will inherit their share”.
Here’s an example to make this more concrete. John has three children, Mike, Ann, and David. Each child has children of their own. To keep it simple, each child has two children of their own. Mike has Mabel and Matt. Ann has Alan and Ava, and David has Dan and Desiree. If John leaves $3 million per stirpes, that means Mike, Ann, and David each get $1 million. The per stirpes means that if Mike, Ann, or David dies BEFORE John, their $1 million share would simply go to their children in equal parts. So for example, if Ann dies before John, Ann’s children Alan and Ava would each get $500,000.
When a will says, “I leave $3 million to my children, per capita” what that translates to in plain English is, “I leave $3 million to my children, and if any of my children die before me, then only my surviving children get this gift”.
So let’s go back to the example to make this clear if it isn’t already. John has these three kids and they each have two children of their own, but Ann dies before John. Since only Mike and David are the only children to survive their father, they each get $1.5 million and Ann’s children get nothing.
When does it make sense to use these approaches?
Famous lawyer answer, it depends.
It depends on the family and what the person making their will wants. If they loved their children equally and all their kids had similarly-sized families, per stirpes makes a lot of sense.
What if one of your children couldn’t have children of their own, but your other child had ten grandchildren? Do you want to give more money to the child with more grandchildren because they need more money to provide for the grandchildren? Or is that unfair and you want to split the estate equally?
If you read about per capita you might stumble on some version of the phrase, equally near, equally dear. The idea behind per capita style distributions is to treat each level of relations equally, so that no particular relative is favored. Like in the example above, John may decide to leave his $3 million per capita so that none of his grandchildren are favored over the others.
Are these the only options?
Heck no. You can direct gifts in your will all kinds of ways. You can use both approaches with different groups of people. (A separate post will go into further detail about class gifts.) You can even do something called a hotchpot where property can be mixed together and then split equally among whatever group of people you like. Hotchpot is a little complicated, so we won’t dig into that here.
But one thing to watch out for is the phrase, “share and share alike”. Using this phrase could have unintended consequences because its meaning can change among different jurisdictions. Using this phrase is fine, as long as it reflects your intent.
To (hopefully) avoid any confusion…
Do not to confuse this post with the post on intestacy. As explained in that article, Ohio’s intestacy law only explains what happens to the property of someone who died without a will. The pattern of inheritance under that statute is somewhat similar to those discussed here. But here we’re talking about someone who died with a will and said in that will that gifts would be given either per stirpes or per capita.
Do not confuse this with the anti-lapse statute. To further muddy the waters, states also have what are called anti-lapse statutes. These are laws that are meant to prevent a bequest from lapsing. In plain English, anti-lapse statutes automatically select another person (or set of persons) to receive a bequest to prevent a gift from failing. For example, say I leave a bequest of $10,000 for a sibling and I don’t select a backup to get that gift if my sibling dies before me (called an alternate beneficiary). If my sibling dies before me, without an anti-lapse statute it would be like I never made that gift at all. That $10,000 would be absorbed into the residue of my estate and whoever is designated to get the residue – say another relative or my spouse – would get it. The anti-lapse statute steps in here to say, since the sibling died first, the sibling’s gift goes to their children, so my nieces and nephews. Anti-lapse statutes vary among states, so it is probably best to avoid using them as an estate planning tool. Like the intestacy statute, the anti-lapse statute is there as a default backup plan for anything that slips through the cracks.
The Takeaway
Per stirpes and per capita are phrases that would probably be helpful to understand when you plan your estate because using the wrong phrase in your estate plan could have an unintended consequence.