There are some Latin terms used in the legal field to describe certain processes, and you will see them in wills and trusts. In this post, we will look at the terms per capita and per stirpes as they apply to beneficiary succession.
Death of a Beneficiary
If a person that you have named as a beneficiary in your estate plan predeceases you, an update will be necessary. However, when you originally draw up the document, you can address this contingency.
To explain by way of example, let’s say that you are leaving inheritances per capita to Paul, Sarah, and Joseph, your three children. If Paul passes away before you do, Sarah and Joseph would be the heirs to the estate, and they would assume ownership of Paul’s share.
For the purposes of this example, we will say Paul has one child. If you leave the bequests per stirpes, Paul’s child would inherit the share that was left to him, and the two surviving children would receive their shares.
Living Trust Versatility
You should seriously consider the utilization of a living trust if you want to make sure that you are comprehensively prepared. With regard to beneficiary designations, you can name successors when you draw up the trust declaration, so you can be certain that your wishes will be carried out.
Some people do not consider the possibility of using a trust because they assume that they would no longer have direct control of the assets.
This idea stems from the fact that there are irrevocable trusts that are used to satisfy some specific objectives, and you do surrender incidents of ownership if you establish this type of trust.
However, the dynamic is completely different with a revocable living trust. You would act as the trustee while you are living, so your ability to access assets that have been signed over to the trust would not change at all.
And of course, you could revoke the trust at any time and reassume direct personal possession of the property.
When you are establishing the trust, you name a successor trustee to assume the role after your passing, and there is another base that you can cover.
Unfortunately, a significant percentage of elders become unable to handle their own affairs at some point in time. To account for this possibility, you can give the successor trustee the ability to manage the trust in the event of your incapacity.
When the trust is being administered, the trustee would act without the supervision of the probate court. Probate is a legal process that would be necessary if you state your final wishes in a will.
This is a positive, because probate is time-consuming and expensive, and the records are available to the general public, so there is a loss of privacy.
Another advantage is the ability to protect the assets and dictate the distribution terms. You can include a spendthrift clause, and the trust would become irrevocable after your death.
The beneficiaries would not have direct access to the principal, and this would apply to their creditors as well, so there is asset protection. With regard to the distributions, you can instruct the trustee to distribute limited assets incrementally over time to prevent lavish spending.
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We are conducting a number of seminars over the coming weeks, and you can learn a lot if you join us for one of these sessions. There is no charge, so this is a great way to build on your knowledge as you make an initial connection with our firm.
You can see the dates if you visit our seminar page, and when you identify the one that works for you, follow the instructions to register so we can reserve your seat.
Need Help Now?
If you have already learned enough to know that it is time for you to work with a Glastonbury, CT estate planning lawyer to put a plan in place, our doors are open. You can send us a message to set up a consultation appointment, and we can be reached by phone at 860-548-1000.
Mr. Horowitz was awarded his Juris Doctor degree with honors from the University of Connecticut School of Law. While attending law school, Mr. Horowitz received the American Jurisprudence Award in Legal Ethics and the Nathan Burkan Award.
After graduation from law school, Mr. Horowitz continued his legal education at New York University School of Law where he received a Post Doctorate Law Degree in Taxation. He has also recently received a national achievement award.
Mr. Horowitz is admitted to practice before all the state courts in the State of Connecticut and the United States District Court.
Mr. Horowitz was selected for Super Lawyers in 2021.
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