If you name more than one beneficiary-for example, you name your two children-then you may be asked to specify whether you want them to inherit “per stirpes” or “per capita.”Say what? First of all, know that It won’t make a difference unless a beneficiary dies before you do and you don’t update your beneficiary designations.It’s easiest to understand these terms by looking at an example. Let’s say you name your spouse as primary beneficiary and your two daughters as alternates. Both daughters have children of their own. Now let’s say that by the time you die, both your spouse and one of your daughters have died. Your daughter left three children.
If you chose per stirpes, your deceased daughter’s half of the proceeds would go to her children. In other words, they would stay in her branch of the family. (Stirpes is from the Latin word for root-think of a family tree.) But if you chose per capita (per head, in English), all the people entitled to inherit-her three children and your other daughter-would split the proceeds; each would get an equal share.