By Michael Ruger, CFP®
Partner and Chief Investment Officer at Greenbush Financial Group
When you fill out a beneficiary form for a retirement account, life insurance policy, or investment account, you may come across the term “per stirpes.” It’s a Latin phrase, but don’t let that intimidate you. Choosing per stirpes for your beneficiaries simply determines what happens if one of your named beneficiaries passes away before you do.
In this article, we’ll cover:
What per stirpes means and how it works
A simple comparison of per stirpes vs. non–per stirpes designations
Why keeping beneficiaries up to date is so important
Special considerations when children or minors are involved
What Does Per Stirpes Mean?
Per stirpes means “by branch” or “by the bloodline.” With this designation, if one of your named beneficiaries passes away before you, their share of the inheritance automatically passes down to their descendants.
If you don’t select per stirpes, your beneficiary designation is considered non–per stirpes, which means that if a beneficiary predeceases you, their share is generally redistributed among the remaining named beneficiaries.
Example: 50/50 Beneficiaries
Let’s walk through a clear example.
Case 1: Non–Per Stirpes (default in many plans)
You name your two children, Anna and Ben, as 50/50 beneficiaries.
Anna passes away before you.
Result: Ben inherits 100% of the account. Anna’s children (your grandchildren) do not receive anything unless you’ve updated the beneficiary form to include them.
Case 2: Per Stirpes
You name your two children, Anna and Ben, as 50/50 beneficiaries per stirpes.
Anna passes away before you, leaving two children of her own.
Result: Ben still receives his 50% share. Anna’s 50% share is split evenly between her two children (25% each).
This is why per stirpes is often called a “fail-safe” designation—it ensures the inheritance follows the family line if a beneficiary dies before you.
Why Keeping Beneficiaries Updated Matters
While per stirpes can act as a backup plan, the best approach is to keep your beneficiary designations current.
If a beneficiary passes away, you can always file a new form naming updated beneficiaries.
If you update promptly, the per stirpes designation never even comes into play.
Regular reviews—especially after major life events like births, deaths, or divorces—can help ensure your assets go exactly where you intend.
Special Considerations for Minors
Per stirpes can create complications if the next in line are minor children. For example, if Anna’s 50% share passes to her 10-year-old child, that minor generally cannot inherit assets outright. Instead, the guardian of the child may have to serve as a custodian to the account until the child reaches the age of majority. However, when the child reaches the age of majority, they gain full control over their inheritance, which may or may not be beneficial.
This raises an important planning question:
Do you want minor children to inherit directly?
Or would it make more sense to create a trust and name the trust as the beneficiary?
Working with an estate planning attorney can help clarify the best approach for your family.
Key Takeaways
Per stirpes means a beneficiary’s share passes down to their descendants if they predecease the account owner.
Non–per stirpes means a predeceased beneficiary’s share is typically divided among the remaining beneficiaries.
Keeping beneficiary forms up to date reduces the need to rely on per stirpes.
If potential per stirpes beneficiaries are minors, additional planning (like a trust) may be necessary.
Beneficiary designations are powerful estate planning tools. A quick review of your forms can make all the difference in ensuring your assets are passed down according to your wishes—without leaving things to chance.
About Michael……...
Hi, I’m Michael Ruger. I’m the managing partner of Greenbush Financial Group and the creator of the nationally recognized Money Smart Board blog . I created the blog because there are a lot of events in life that require important financial decisions. The goal is to help our readers avoid big financial missteps, discover financial solutions that they were not aware of, and to optimize their financial future.
Frequently Asked Questions (FAQs)
What does “per stirpes” mean on a beneficiary form?
“Per stirpes” is a Latin term meaning “by branch” or “by bloodline.” It ensures that if a named beneficiary passes away before you, their share automatically goes to their descendants, such as their children or grandchildren.
How does per stirpes differ from non–per stirpes?
With a per stirpes designation, a deceased beneficiary’s share passes down to their heirs. In contrast, a non–per stirpes designation redistributes that share among the remaining living beneficiaries, bypassing the deceased beneficiary’s family line.
Why should I keep my beneficiary designations up to date?
Life events such as marriages, births, deaths, or divorces can change your intentions for who should inherit your assets. Regularly updating your forms ensures your accounts are distributed according to your current wishes rather than relying on default rules or outdated designations.
What happens if a per stirpes beneficiary is a minor?
Minors typically cannot inherit assets outright, so a custodian or guardian may need to manage the funds until the child reaches adulthood. Some families use trusts to control when and how minors receive their inheritance.
When should I consider naming a trust instead of individuals as beneficiaries?
If you want more control over how and when heirs—especially minors—receive their inheritance, naming a trust as the beneficiary can help. A trust allows you to set specific rules for distributions and avoid complications with guardianship or early access to funds.
Is per stirpes the best option for everyone?
Not necessarily. While per stirpes ensures assets follow the family line, some people prefer equal redistribution among surviving beneficiaries. The best choice depends on your family structure, estate goals, and how you want your assets to be passed down.
