“That’s not fair!” is a common child’s refrain as they advocate for themselves or express what they feel to be unjust. This pursuit of fairness, however, often follows families into adulthood, and it can resurface with real consequences when an estate plan is on the table.
Ideas about fairness often influence family dynamics and may continue when accounts and property must be divided after a death. Estate planning documents and state laws use several methods to determine how property passes among descendants. Per stirpes, by representation, and per capita are terms commonly used to describe how a deceased beneficiary’s share is allocated among their surviving beneficiaries.
The precise meaning and operation of these terms can vary by state. An estate planning document may also define or modify the distribution method it uses. It is therefore important to review the specific language of the governing document rather than relying solely on the label.
Consider a simple example in which a parent leaves property in equal shares to their children. If all the children survive the parent, each child generally receives an equal share. The distribution method becomes especially important if one of the children dies before the parent but leaves descendants, such as their own children. Depending on the language of the document and applicable state law, that deceased child’s share may pass to their descendants, be reallocated among the surviving children, or be divided in another specified manner.
The differences among per stirpes, by representation, and the various forms of per capita distribution are most easily understood by examining how each method treats the share of a beneficiary who does not survive the testator.
Per Stirpes vs. By Representation vs. Per Capita Distributions: What’s the Difference?
Per Stirpes Distribution
Consider the following example. Arthur has two children, Becky and Carl. Becky has four children, and Carl has one child.
The Latin term per stirpes means “by roots” or “by branch.” Under a traditional per stirpes distribution, the estate is divided into shares at the children’s generation. If a child has died before the person whose estate is being distributed, that child’s share passes down that child’s branch to their surviving descendants.
If Becky and Carl both survive Arthur, each receives one-half of Arthur’s estate.
If Becky dies before Arthur and leaves four surviving children, Becky’s one-half share passes to her children. Becky’s four children divide that share equally, so each receives one-eighth of Arthur’s estate. Carl receives his one-half share.
Becky Predeceases Arthur (Carl Survives)
| Recipient | Share of Estate |
| Each of Becky’s four children | 1/8 |
| Carl | 1/2 |
If both Becky and Carl die before Arthur but leave surviving descendants, each child’s one-half share continues down that child’s respective branch. Becky’s four children divide her one-half share, receiving one-eighth each. Carl’s only child receives Carl’s entire one-half share.
As a result, Arthur’s five grandchildren do not receive equal shares. Each grandchild in Becky’s branch receives one-eighth, while the grandchild in Carl’s branch receives one-half. The distribution preserves equality between Arthur’s two-family branches rather than equality among all five grandchildren.
The precise operation of aper stirpes distribution may vary under state law and the governing document’s language.
Both Becky and Carl Predecease Arthur
| Recipient | Share of Estate |
| Each of Becky’s four children | 1/8 |
| Carl’s only child | 1/2 |
The proportions allocated to each branch remain the same as in the prior example. Under traditional per stirpes distribution, Arthur’s estate is first divided into equal shares at his children’s generation. Becky’s branch receives one-half, and Carl’s branch receives one-half. Each branch’s share then passes to the surviving descendants within that branch.
If one of Becky’s children also dies before Arthur but leaves surviving descendants, that child’s one-eighth share would generally continue down that child’s branch and be divided among their descendants. This process can continue through later generations.
Per stirpes distribution, therefore, preserves equality between the original family branches, even when the number of surviving descendants in each branch differs. The precise result remains subject to the governing document and applicable state law.
By Representation Distribution
In a by representation distribution, descendants generally take the share that their deceased ancestor would have received if still alive. Because the precise method of dividing shares may vary under applicable state law or the governing document, the controlling definition should always be confirmed.
If one of Arthur’s children survives him, that child receives a share at the children’s generation. The surviving child’s descendants generally do not receive a separate share because their parent is alive to inherit.
Now consider what happens if both Becky and Carl die before Arthur. Because neither child survives, the distribution moves to the grandchildren’s generation. All five grandchildren are members of the same generation, so they divide Arthur’s estate equally. It does not matter that four grandchildren descend from Becky and only one descends from Carl.
Both Becky and Carl Predecease Arthur
| Recipient | Share of Estate |
| Each of Becky’s four children | 1/5 |
| Carl’s only child | 1/5 |
Under the traditional per stirpes approach described earlier, Becky’s branch would receive one-half of the estate and Carl’s branch would receive the other half. Under the by-representation method illustrated here, all five grandchildren receive equal one-fifth shares.
Because states and estate planning documents may define by representation differently, the governing law and the document’s specific language must be reviewed to determine the intended distribution.
Per Capita at Each Generation Distribution
The Latin term per capita means “by the head.” A trust may direct the trustee to “distribute the trust property per capita at each generation to my then-living descendants.”
Under this method, the estate is first divided into shares among the closest generation that contains at least one living descendant. Each living descendant in that generation receives a share. The shares allocated to deceased members of that generation who left surviving descendants are then combined and divided equally among the eligible descendants of the next generation.
Assume that Arthur has three children: Becky, Carl, and Diane. Becky has four children, Carl has two, and Diane has one. Becky and Carl die before Arthur, and Diane survives him.
Arthur’s estate is initially divided into three equal shares among his children’s generation. Diane receives her one-third share directly. Becky’s and Carl’s two shares, totaling two-thirds of the estate, are combined and divided equally among their six surviving children. Each grandchild receives one-ninth of Arthur’s estate. Diane’s child does not receive a share because Diane survived Arthur and receives her own share.
Becky and Carl Predecease Arthur, and Diane Survives
| Recipient | Share of Estate |
| Diane | 1/3 |
| Each of Becky’s four children | 1/9 |
| Each of Carl’s two children | 1/9 |
The defining feature of “per capita at each generation” is that the shares of deceased beneficiaries at one generation are pooled and divided equally among the eligible descendants at the next generation. This method produces equal shares for descendants at the same generational level who are taking in place of deceased members of the prior generation.
Because terminology varies among states and documents, the specific definition in the governing instrument and applicable law controls.
We Are Here to Help
Each of these distribution strategies attempts to achieve some form of fairness, but what is fair can be subjective. As you make plans for your family, contact our team. At McDonald Law Firm, we can help you craft a customized plan that you will feel confident about. Contact McDonald Law Firm, an experienced Howard County, Montgomery County and District of Columbia estate planning, special-needs planning and Medicaid planning firm at (443) 741-1088; (301) 941-7809, (410) 337-8900 or (202) 640-2133; or use the following link: https://www.mcdonaldesq.com/#contactWrapper to schedule an initial consultation to discuss how which distribution strategy is best for your family.
DISCLAIMER: THE INFORMATION POSTED ON THIS BLOG IS INTENDED FOR EDUCATIONAL PURPOSES ONLY AND IS NOT INTENDED TO CONVEY LEGAL, INSURANCE OR TAX ADVICE.
