In every field there are words and phrases that will be foreign to industry outsiders. This is especially true of the legal world.
Some words are unintelligible because they are professional terms of art with meanings that differ from the word’s use in everyday speech—think “negligence” or “liable.” Others are unclear because they are literally foreign.
For hundreds of year Latin was the lingua franca of the educated class, including the courts. Though the primary language (for us, at any rate) is now English, hundreds of Latin words and phrases are still in common use in the estate planning world.
Unfortunately, the legal meanings of these Latin phrases are not always deducible from the literal meanings of the words.
One such phrase is per stirpes, which occurs primarily in the context of inheritance. So, what does per stirpes mean, why is it important, and how will it come into play in your estate plan?
Per Stirpes: “By the Branches”
Per stirpes is a Latin phrase that you may run across in your estate plan or in the Florida statutes regarding wills and estates.
Stirpes is the plural form of the noun stirps meaning “branch,” and the preposition per means “by” or “according to.” English doesn’t really have any cognates from stirps (except in the field of genealogy), but the preposition per is still used, both in set phrases like “per se” and more widely as in “per your request.”
Long story short: Per stirpes means “by or according to the branches.” Of course, “branches” in this context refer to the branches of your family tree, that is your lineage. In short, it provides a way for descendants (i.e. higher “branches” of the tree) to receive portions of an inheritance that would have gone to a now-deceased ancestor (i.e. lower branches).
So, how does this play out in the real world?
Let’s say Tammy has three kids, and her estate documents indicate that her estate is to be distributed per stirpes. This means Jan, Jim, and Jack all receive a 33.3% share of the estate. Easy-peasy.
But what if her eldest son Jack dies leaving behind three kids of his own (i.e. Tammy’s grandchildren)?
Well, because her estate passes per stirpes, when Tammy passes away Jack’s three children would inherit his portion of the estate. In other words, Jan and Jim would each receive their original 33.3% share and the remaining 33.3% that Jack would have received had he not died would split between his three kids.
This inter-generational transfer mechanism is very important. Without it, Tammy’s estate would split evenly between her two surviving kids effectively, albeit inadvertently, disinheriting Jack’s lineage. Perhaps Tammy did want her estate to pass to her kids and her kids alone, or maybe when she made her will she didn’t yet have any grandkids so simply did not think about it. But it’s also possible that she wanted to—and believed her estate plan would—provide for her children and their descendants.
Per Stirpes in Florida Wills and Estates
Below are a few of the places in which per stirpes is used in Florida’s statutes regarding succession and wills. When reading any of these statutes, there will be one less phrase that will cause you consternation.
689.14 Entailed estates
No property, real or personal, shall be entailed in this state. Any instrument purporting to create an estate tail, express or implied, shall be deemed to create an estate for life in the first taker with remainder per stirpes to the lineal descendants of the first taker in being at the time of her or his death. If the remainder fails for want of such remainderman, then it shall vest in any other remaindermen designated in such instrument, or, if there is no such designation, then it shall revert to the original donor or to her or his heirs.
732.104 Inheritance per stirpes
Descent shall be per stirpes, whether to descendants or to collateral heirs.
732.401 Descent of homestead
(1) If not devised as authorized by law and the constitution, the homestead shall descend in the same manner as other intestate property; but if the decedent is survived by a spouse and one or more descendants, the surviving spouse shall take a life estate in the homestead, with a vested remainder to the descendants in being at the time of the decedent’s death per stirpes.
(2) In lieu of a life estate under subsection (1), the surviving spouse may elect to take an undivided one-half interest in the homestead as a tenant in common, with the remaining undivided one-half interest vesting in the decedent’s descendants in being at the time of the decedent’s death, per stirpes.
732.603 Antilapse; deceased devisee; class gifts
(1) Unless a contrary intent appears in the will, if a devisee who is a grandparent, or a descendant of a grandparent, of the testator:
(a) Is dead at the time of the execution of the will;
(b) Fails to survive the testator; or
(c) Is required by the will or by operation of law to be treated as having predeceased the testator,
[then] a substitute gift is created in the devisee’s surviving descendants who take per stirpes the property to which the devisee would have been entitled had the devisee survived the testator.
(2) When a power of appointment is exercised by will, unless a contrary intent appears in the document creating the power of appointment or in the testator’s will, if an appointee who is a grandparent, or a descendant of a grandparent, of the donor of the power:
(a) Is dead at the time of the execution of the will or the creation of the power;
(b) Fails to survive the testator; or
(c) Is required by the will, the document creating the power, or by operation of law to be treated as having predeceased the testator,
[then] a substitute gift is created in the appointee’s surviving descendants who take per stirpes the property to which the appointee would have been entitled had the appointee survived the testator. Unless the language creating a power of appointment expressly excludes the substitution of the descendants of an object of a power for the object, a surviving descendant of a deceased object of a power of appointment may be substituted for the object whether or not the descendant is an object of the power.
732.611 Devises to multigeneration classes to be per stirpes
Unless the will provides otherwise, all devises to descendants, issue, and other multigeneration classes shall be per stirpes.
736.1103 Gifts to multigeneration classes to be per stirpes
Class gifts to descendants, issue, and other multigeneration classes shall be per stirpes.
736.1106 Antilapse; survivorship with respect to future interests under terms of inter vivos and testamentary trusts; substitute takers
(2) A future interest under the terms of a trust is contingent upon the beneficiary surviving the distribution date. Unless a contrary intent appears in the trust instrument, if a beneficiary of a future interest under the terms of a trust fails to survive the distribution date, and the deceased beneficiary leaves surviving descendants, a substitute gift is created in the beneficiary’s surviving descendants. They take per stirpes the property to which the beneficiary would have been entitled if the beneficiary had survived the distribution date.
Detailed Inter-Generational Planning
Preserving your financial legacy requires careful planning. There are many facets and possible scenarios to account for, and overlooking seemingly minor terms or phrases can have disastrous consequences.
This is where an estate planning professional is most useful.
Contact me today to schedule a Financial Legacy Review, so we can understand your goals, discuss your planning options, and build a comprehensive Financial Legacy Blueprint that will achieve your goals.