Sunday, April 02, 2006

What Does the Phrase "Per Stirpes" Mean?

Literally, the words “per stirpes” mean by roots or by stocks. These words are used in wills and trusts, but can be confusing.

I sometimes use "per stirpes" to describe a method of distribution among issue (in other words children, grandchildren, great grandchildren etc.) For example, I might direct my trustee to give what is left of my estate after paying my debts and funeral expenses to “those of my issue who survive me per stirpes.” When I write this, I mean that my estate will be divided equally among my children, but if a child has died before me, that child’s share will be divided equally among those of his or her children (my grandchildren) who are alive at my death. If both a child and one of that child’s children die before me (“my deceased grandchild”), then those of my great grandchildren who are the children of my deceased grandchild will share the portion that would have gone to their parent.

Say I have three children: Fred, John and Mary. Fred has four children: Jean, Frank, Sue and Paul. Jean has two children: Mike and Ray. If I leave my estate to my issue per stirpes, and Fred and Jean die before me, then John and Mary will each receive one third. If Fred had survived me, he would have received one third, but because he did not, his children will take his one third by representation. Frank, Sue and Paul will each get one twelfth (one quarter of one third.) If she had lived longer than me, Jean would have also received one twelfth. Because Jean has died, her one twelfth is divided equally between Mike and Ray, who each get one twenty-fourth. (I sure hope my math is right.)

If something is given to “issue per stirpes,” then if a person in one generation has died before the relevant time, members of the next generation take their deceased parent's share by representation.

This method of distribution can be contrasted with a “per capita” distribution. If I give my estate to “those of my issue alive at my death equally per capita,” then all of my children, grandchildren, and great grandchildren etc. who are alive at my death would receive an equal share. If I leave three children, six grandchildren, and four great grandchildren and no great great grandchildren alive at my death, each one would then receive one thirteenth of my estate.

I have sometimes seen wills that leave gifts to “my children per stirpes.” I am not sure what this means. I suspect that the drafter may mean the same thing as “to my issue per stirpes,” but it doesn’t really say that. If the drafter only wants the one-generation of children to inherit, then “per stirpes,” is meaningless. On the other hand, if the drafter means that if a child dies before the gift will take effect, then “children” must be given an extended meaning to include other generations.

Worst, I once dealt with a will in which the residue of an estate was left to one specific beneficiary “per stirpes.” The beneficiary had died before the testator. I represented the executor, who asked the court to interpret the will (which had been drafted by someone who was not a lawyer.) The court found that the testator intended for the named beneficiary’s children to take her share. The case is Royal trust Corp. of Canada v. Aitken, 1998 CanLII 4767 (BC S.C.). I think that this was the right result, but the court application would not have been necessary if the will had been properly drafted.

Because the words “per stirpes” can be misunderstood, some lawyers avoid them. I do use them occasionally, but my practice is to include a clear definition of the words “per stirpes” in the will or trust deed whenever I use them.

2 comments:

Anonymous said...

Thanks, that makes sense.

Anonymous said...

So where does the spouse of your child fit in if your child is deceased prior to you and has children?