What Does Per Stirpes Mean?.

Per stirpes is a Latin phrase used to describe the process of inheriting an estate. When applied to the distribution of assets in an estate plan, the phrase per stirpes is used to describe the method in which the descendants of the deceased will receive part or all of the estate.

The term “per stirpes” literally means “by branch” or “by representation.” This means that if a beneficiary of the estate passes away, their share of the assets will not be eliminated but instead will be inherited by that beneficiaries’ descendants.

For example, if Mr. Smith creates an estate plan with his son Bob and his daughter Jill listed as beneficiaries, each of them will inherit 50% of the estate. However, if Bob passes away, Bob’s son Steven would receive the 50% that Bob was to inherit instead. This would mean that Jill would not receive 75% of the estate, but instead would still receive her 50% and Bob’s estate would go to his descendants in his place.

In sum, per stirpes is a legal and financial term for describing a distribution of assets in an estate plan. The phrase per stirpes means “by branch” and it allows for beneficiaries to pass on their share of the estate to their descendants instead of it being eliminated. College students learning about business and finance should familiarize themselves with this phrase so that if they ever need to set up an estate plan, they will understand how their assets will be distributed under the per-stirpes method.