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Will Your Assets Be Distributed Properly? The Differences Between Per Stirpes & Per Capita – Finger Financial Five #110

“Life and death are one thread, the same line viewed from different sides.” – Lao Tzu

Will your assets be distributed to the people you want?

Most people have their spouse as the primary beneficiary and their children as contingent beneficiaries.  

Whether you make your children the primary beneficiaries or contingent beneficiaries, you will have to elect the method by which your assets are divided among your children.  In short, you will have to elect between “per stirpes” and “per capita.”

To illustrate the important distinction, let’s use the following example:  Suppose you have 3 children (Alice, Bob and Charles) — Alice predeceases you and Alice has 3 children (we will assume here that your spouse has also predeceased you or that you have no spouse).

In this example, if you bequeath your assets to your children “per stirpes,” your assets will be divided into thirds – Bob and Charles each receive one-third and the remaining one-third is divided among Alice’s 3 children.  

In this same example, if you bequeath your property to your children “per capita,” your assets are divided in half – one half goes to Bob and the other half to Charles.  In other words, Alice’s children do not receive anything.   

See the chart below:

Many IRA and 401k accounts, annuities, and insurance policies have beneficiary forms that default to “per capita.” If you would prefer “per Stirpes,” you have to check a separate box on that document. 

Double-check to make sure your accounts are set up according to your wishes. 

Let me know if you have any questions. Feel free to email me at [email protected] or click here to set up a phone appointment. 

Riverbend was mentioned on CNBC.com. Here’s how to score a charitable tax break on Giving Tuesday.

On the lighter side, we went to Nashville over Thanksgiving. Iren did a fantastic job of getting us into the Bluebird Cafe for dinner. Many very famous people have played there. Shania Twain, Taylor Swift, and Faith Hill, just to name a few. 

Hope all is well with you and your family,

Jeremy 

Finger Financial Five – 5 points in 5 minutes or less – is to provide you with a weekly shot of useful financial information.  My intention is to share principles, so that you will have more clarity and peace, that help you make better financial decisions.

Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor; DBA Riverbend Wealth Management.

This content is developed from sources believed to be providing accurate information and provided by Riverbend Wealth Management. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stratos Wealth Partners and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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