You’re getting up there in years — but so are your adult children. While your family has always been a long-lived bunch, there is still the possibility that one of your children won’t live long enough to receive their inheritance (especially if probate drags on).
What happens to that heir’s share of your estate? It may depend on how your will is written.
Per capita inheritances and per stirpes: Understanding the difference
If your will specifies that your estate is to be divided equally among your children “per capita,” then the portion belonging to an heir who doesn’t survive long enough to collect essentially lapses.
In other words, your estate will still be divided equally among your remaining living children. For example, imagine you have three children: Anne, Bob and Charlie. Anne dies before your probate is settled, so Bob and Charlie will then divide your estate equally.
If your will specifies that your estate is to be divided equally among your children “per stirpes,” that means that any portion belonging to a deceased heir will transfer to their estate and their heirs.
For example, imagine again that you have three children: Anne, Bob and Charlie. Anne dies, but the per stirpes provision of your will means that her two children, Diane and Edward, will inherit Anne’s share of your estate according to the terms of Anne’s will.
Which is better?
It depends on your preferences. If you want any share of your estate that would have gone to your deceased adult child to go to their children (your grandchildren), for example, then per stirpes is the right choice. If that isn’t a concern, then per capita is best.
These are just some of the many complex issues that you may have to decide when drafting your estate plan. The more you know, the easier it will be to make informed choices.