As a business professional, it’s important to understand the legal terms associated with key business decisions and the estate planning of key stakeholders. One common legal term that may arise is “per stirpes,” also known as “by representation.” Per stirpes is Latin for meaning “by branch” or “by root” and is used to describe the inheritance process for beneficiaries.
How Does Per Stirpes Work?
Per stirpes is used when a beneficiary predeceases the decedent. So rather than the surviving beneficiaries directly inheriting the decedent’s estate, the deceased beneficiary’s descendants receive a share of the estate. Inheritance is passed down the line from the deceased beneficiary as if the beneficiary had taken part in the initial distribution.
For example, if a decedent has three children as beneficiaries and one passes away before the decedent, per stirpes would dictate that the deceased child’s share of the estate be distributed amongst their children.
Benefits of Per Stirpes
In some cases, per stirpes can be used to the advantage of the estate. If a decedent would have wanted their estate to be divided exclusively among their living descendants, per stirpes ensures that this is done in a fair and equitable way, regardless of any changes in the family’s dynamics in the meantime.
Per stirpes also helps to provide additional clarity in estate planning. When using per stirpes, the estate can be divided simply among the surviving beneficiaries and the deceased beneficiary’s descendants. This way, family members can be confident about who will inherit their share of the estate.
Importance of Consultation
Ensuring that per stirpes, and other legal terms, are properly incorporated into an estate plan is critical. The best way to guarantee that is to consult with an experienced estate planning attorney who can help you understand how best to use per stirpes to your advantage.