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designating beneficiariesIn your estate plan, properly designating beneficiaries is equally important as choosing your beneficiaries. As inferred in the article Considerations for Choosing Your Beneficiaries, choosing additional beneficiaries to designate as alternate beneficiaries in the event a primary beneficiary predeceases you would help in avoiding unintended consequences. However, there are two additional beneficiary designations available to consider in such a situation: per stirpes and per capita. 

Designating Beneficiaries Using Per Stirpes

Typically, when designating beneficiaries using per stirpes, you are dividing property among the descendants of the primary beneficiary. So, if a primary beneficiary predeceases you, the property will pass to the children or the grandchildren of the deceased beneficiary.

To illustrate how per stirpes generally works, the article “What is Per Stirpes?” by Nolo provides the following example:

Fred leaves his house jointly to his son Alan and his daughter Julie. But Alan dies before Fred, leaving two young children. Fred’s will states that heirs of a deceased beneficiary are to receive the property PER STIRPES: Julie will receive one-half of the property, and Alan’s two children will share his half in equal shares.

Although the use of per stirpes seems straightforward, if not written correctly in the will, unintended circumstances may occur.

Designating Beneficiaries Using Per Capita

Using the per capita designation is an easier concept than per stirpes. Basically, per capita divides an asset equally among a specified group of beneficiaries. So, if a primary beneficiary predeceases you, the asset will pass to each remaining beneficiary in equal shares.

In the same article “What is Per Stirpes?” by Nolo, the following example provides insight on how per capita generally works:

Like the example above, but Fred’s will states that the property should be divided PER CAPITA:  Julie and the two grandchildren will each take an equal share – one third.

In this example, Julie has her share reduced to one third because of the per capita designation, which seems unfair. Since most people planning their estates prefer a fair distribution among beneficiaries, per stirpes becomes the preferred designation. Moreover, although an easier concept, misusing per capita can also result in unintended consequences.

Using Per Stirpes and Per Capita

The designations of per stirpes and per capita are general in nature and leave a lot to interpretation if not used correctly. Therefore, unless you need to use these designations, you should avoid using them. Instead, list specific beneficiaries such as alternate beneficiaries or residuary beneficiaries.

Finally, estate planning is difficult enough without making it more difficult. So, keep your beneficiary pool to a precious few and specifically list each beneficiary. In the end, nothing will be left to interpretation and your property will transfer smoothly.

Was this article insightful? Do you understand the basic concept behind the two designations? Share your comments or questions in the comment area below. 


Betsy Simmons Hannibal, “What is Per Stirpes?” [NOLO Legal Articles]