What does "per capita" mean in estate planning?

A quick follow-up to the post on the term "per stirpes" here, since the Series 65 exam and Series 66 exam could easily bring up the terms. If a will or revocable trust states that the beneficiaries inherit their shares "per stirpes," if a beneficiary has died by the time the deceased passes on, his or her share will go to his or her descendants. That way, if there are three beneficiaries, the estate will be divided into thirds, period. On the other hand, if the beneficiaries inherit their share of the estate "per capita," a "head count" is taken of all the living beneficiaries at the time of death. If there are three beneficiaries named in the will or trust but one has already died, then the assets are divided among just the remaining two.

Online Classes for Series 65 and Series 66 Exams

No matter which materials you have, I recommend that you sign up now for our live online classes for the Series 65 and Series 66 exams. We present the exam material in digestible bites of information that you can review on your own time at your own pace by watching the recording. No instructor-at-the-whiteboard or talking heads. This is full-color animation, photos, and voiceover, making the material understandable and often interesting.
Seriously. Best of all, you can ask questions during the session!
Use the link at the end of this post to get on board and put the Series 65 or Series 66 exam behind you. Sign Up Now!

What is Per Stirpes, Please?

The Series 65 and Series 66 exams ask a handful of questions about estates and trusts, and you could end up seeing the phrase per stirpes on a test question. In fact, you'll likely bump into it in your financial planning activities, so it is worth knowing even if it doesn't show up. As I just pulled from a Transfer on Death Beneficiary Agreement for a brokerage account, " the term 'per stirpes' shall mean the following:
if any primary or contingent Beneficiary does not survive the account owner, but leaves surviving descendants, any share otherwise payable to such Beneficiary shall instead be paid to such Beneficiary's surviving descendants."
And, there you have it. If a will, a trust, or a transfer on death account name a beneficiary, the term "per stirpes" means that if that beneficiary is to be paid but has passed away, his or her share passes to his or her own beneficiaries. Pass the Series 66 exam