One of the most common ways to distribute in the state is “per stirpes.” In fact, in California, distribution is presumed to be per stirpes unless expressly stated otherwise. Per stirpes distribution only affects your grandchildren. Here’s why:
Per stirpes definition: per stirpes is a method of distributing an estate to ensure that the estate remains in the family bloodlines. If you have a predeceased child, distribution per stirpes automatically includes your grandchildren.
In this article, you will learn more about how per stirpes distribution works, as well as some unintended consequences for your grandchildren. Additionally, you will learn
How to Know If Your Estate is Distributed Per Stirpes
In general, the California Probate Code assumes that the manner of distributing an estate is per stirpes.[i] Also, there is specific language you can look for to know for sure whether a distribution is per stirpes.
For instance, if a will or the trust says something like: “to my children, by representation” or “to my children, by right of representation.” Then, distribution is per stirpes.[ii]
Similarly, a Will or a Trust says: “to my children in the manner provided in the Probate Code section 246.” Then, distribution is also per stirpes.[iii]
By contrast, if the Will or Trust DOES NOT say the phrases “to my children, per capita at each generation,” or “to my children in the manner described in Probate Code247.” Then, distribution is presumptively per stirpes.[iv]
Finally, and most obviously, if the will or the trust says “to my children, per stirpes,” then distribution is, you guessed it, per stirpes!
Example of How Per Stirpes Distribution Works
Suppose Jack and Jill have an estate worth $1 million. They have three children Bill, Sue, and Bob. They also have six grandchildren.
Jack and Jill have a Trust that gives their estate “to our children, by representation.” Thus, distribution is per stirpes.
If all of their children are alive at the time of their death, then the estate is simply distributed equally to Bill, Sue, and Bob.
But, suppose Bill dies before Jack and Jill. Then Sue and Bob still get their equal share of the estate. But Bill’s share of the estate is going to be distributed, per stirpes, to Bill’s three children. As the chart below demonstrates.
Accordingly, per stirpes distribution only truly affects Jack and Jill’s six grandchildren. In the example above, three of the grandchildren inherit a portion of the estate, but the remaining three do not.
Although it is reasonable to want Bill’s children to inherit Bill’s share, a distribution per stirpes can have some unintended consequences. Moreover, depending on your preferences, per stirpes distribution may seem to you to be unreasonable and unequal.
If you would like to learn more about per stripes distribution with more examples, check out our article called: “Per Stirpes Definition with Infographic, Charts, and Examples.”
The Unintended Consequences of Per Stirpes Distribution
If you have several grandchildren and more than one child who has predeceased you, then per stirpes distribution can lead to seemingly unequal results.
“Per stirpes” is a Latin phrase that means “by the root.” Thus, per stirpes focuses on each “stirp” or each “root” in your downline family tree.
Bill, Sue, and Bob are all “stirps” or “roots” of Jack and Jill’s downline family tree. Per stirpes preserves each roots’ share of the estate as articulated in a trust or a will.
But, the focus of per stirpes is on each downline root, so the down line generations may receive unequal distributions.
For example, suppose that both Bill and Bob died before Jack and Jill. Sue would still receive her 33% share. Additionally, per stirpes distribution preserves the 33% shares of Bill and Bob, which pass to their children.
But as the example below shows, Bob’s children receive a larger share of the estate then Bill’s children. This is because per stirpes only preserves each “root’s” individual distribution and passes it to the downline generations.
Think of per stirpes as an equal distribution on a vertical basis. If you draw a line vertically from each root, each downline beneficiary receives an equal share based on the original share of the root.
So your grandchildren receiving equal distributions of your estate is important to you, then consider per capita distribution.
Definition of Per Capita at Each Generation
Unlike per stirpes, which focuses its distribution vertically by each “root,” per capita at each generation focuses its distribution method horizontally along each generation. Per capita recalculates each share for each generation entitled to inherit so that the distribution is equal.
Once again, this only affects your grandchildren. For instance, if Jack and Jill die and Bill, Sue, and Bob are alive, then it doesn’t matter which method of distribution they chose, because the estate will still get distributed evenly between Bill, Sue, and Bob.
But if one or multiple children die before Jack and Jill, then a distribution per capita at each generation ensures that the inheriting grandchildren receive equal amounts. For example, consider the chart below:
As you can see, Sue still gets her 33% share of the estate. But, unlike the per stirpes example above, per capita recalculates the shares of Bill and Bob. The grandchildren take even shares of Bill and Bob’s portion of the estate. Thus, each grandchild receives the same 13.3% of the estate.
You will know if distribution is per capita at each generation if your Will or Trust says either of the following phrases:
“to my children in the manner provided in section 247 of the California Probate Code.”[v]
“to my children per capita at each generation.”[vi]
If “even-steven” is part of your household vocabulary, then a distribution per stirpes may concern you because it could mean that your grandchildren receive unequal distributions.
On the other hand, if you are only concerned about preserving your childrens’ share of the estate, then per stirpes distribution is exactly what you want.
If you enjoyed this article, you may also enjoy “Per Stirpes vs. Pro-Rata: What’s the Difference.”
[i] California Probtae Code § 246(b).
[ii] California Probate Code § 246(a) &(b).
[iii] California Probate Code § 246(a).
[iv] Cf California Probate Code § 247 and 246.
[v] California probate Code § 247(a).
[vi] California Probtae Code 247(b).