Per Stirpes

Most people have no idea what this term (Latin for “by roots”) means.  Per stirpes is a designation you can include when naming beneficiaries of life insurance policies, investments or your estate that stipulates how your assets should be transferred if any beneficiaries pass away before you. With a per stirpes designation, any amount that you leave for a beneficiary that predeceases you will be passed down evenly to his or her own heirs, usually children.  So for example, you name your children as beneficiaries of your life insurance and you and one of your children pass away in an auto accident.  A Per Stirpes beneficiary designation would mean your deceased child’s portion of your policy will go to their heirs directly.  Otherwise, that child’s portion of the proceeds will go to their surviving siblings.