Q:

What's the difference between per stirpes and per capita distributions?

A:

Quick Answer

The difference between per capita and per stirpes estate distribution is that per stirpes distribution allows the inheritance to pass down the line from the original inheritor to subsequent inheritors. A per capita bequest ceases with the death of the original beneficiary rather than passing to his estate.

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Full Answer

It is easy to understand the different forms of estate distribution in terms of generations. If a person leaves property to his children in a per stirpes bequest, anything left to an individual child would go to that child's inheritors if the child died before the distribution of the estate. If, on the other hand, the testator left the estate in per capita form, the child's share would revert to the other children of that generation, his brothers and sisters, rather than being passed to his inheritors.

Testators often use per stirpes distribution in estate planning to cover the wrinkles that might arise in typical family situations, and as such it is important for those making provision for their estates to be very clear if they do not wish to use it. Experts generally advise against using a per capita distribution to skip generations because of the associated tax implications, which can become very costly to an estate and destroy its value to the inheritors.

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