Per Capita vs. Per Stirpes - Making Sense of the Difference for the MEE on the UBE

One of the more common areas of confusion within the subject of Wills is the distinction between the two methods of intestacy distribution known as Per Capita and Per Stirpes.  This blog post was created to shed some light on how best to approach these distribution methods when tackling a common Wills MEE issue on the examination.  

 I. Intestate Property Definition

This includes assets held in the decedent’s name alone that do not pass by operation of law or by a will.  It should be noted that operation of law means that a non-probate assets that passes automatically because of the way the property title is held, REGARDLESS of the existence of a will. Keep in mind that the residuary (aka the rest left over) is calculated after claims, taxes, and other particular.

 II. The Application of the Intestacy Rules

Intestacy Rules Apply when 1) the decedent left NO WILL OR DID NOT properly execute a will, OR 2) the will DOES NOT provide for a proper distribution of his or her estate and so results in what is called Partial Intestacy, OR 3) A DEVISEE successfully challenges the will and the will IS DENIED PROBATE.

 III. To Whom a Will of Intestacy is Distributed

The Order of Distribution is as follows: (a) IF NO children, the Spouse takes all OR (b) IF there are children,  the Spouse takes $50K PLUS ½ Residuary and the children split the remainder. OR (c) ONLY children remain (no spouse), children split in equal Shares.

 IV. Methods of Intestacy Distribution

1) Per Capita at each Generation – UPC Approach – Definition: Divide the property into as many equal shares as there are members of nearest generation of issue who survive decedent and deceased members of the generation with issue who survive decedent.

Practical Meaning - Per Capita is derived from the Latin term meaning “Per Head”. For example, if your children are your beneficiaries, and a child predeceases you, then your surviving children and the deceased child’s children (your grandchildren) would all receive an equal inheritance.

 

2) Per Capita w/Representation – Definition: The per capita with representation approach divides the property equally among first generation when at least one member survives decedent, with the shares of each member of that generation who does not survive decedent passing to the then-living issue of the non-living member. If the non-living member has no then- living issue, then the non-living member does not receive a share.

Practical Meaning - By Representation means “By Generation”. For example, if your children are your beneficiaries, and a child predeceases you, then the deceased child’s children (your grandchildren), would equally inherit the share of your predeceased child (their respective parent).  However, in the event that more than one child predeceases you leaving children (your grandchildren from more than one child), all of your grandchildren, as a generation, would receive an equal inheritance. The shares of all of your predeceased children would be combined and divided equally among the next generation — all of their children (all of your grandchildren) — not just their respective children.

3) Per Stirpes– Most Common in the US – Definition: Issue takes in equal portions the share that their deceased ancestor would have taken, if living.  The estate is first divided into the total number of children of the ancestor who survive or leave issue from those who survive.

Practical Meaning - Per Stirpes is derived from the Latin term meaning “By the Root” or “Down the Line”. It means inheriting property by a right of a deceased ancestor. 

PER CAPITA EXAMPLE:

PER STIRPES EXAMPLE: