Estate planning is not that easy as there are so many decisions that you have to take. Now, this is clear that you would not live forever but your assets would last. This income would continue even if you would not be there to receive it. It is a very hard decision to decide on whom to leave your investment returns or your assets. No matter what you choose to invest in but you have to name someone as the beneficiary. This is so shocking to know that people find it very difficult when it comes to beneficiary choosing. Sometimes it is an easy decision while sometimes it can be very hard.
There can be two kinds of scenarios when it comes to deciding the beneficiary of your shares. Things would be simple if you have one asset holder. If you are a parent of a single child then you don’t have to look up options. It is quite simple that your only child would become the beneficiary of your assets after your death. The same would happen if you have one grandchild who would look after the asset after your child. In this case, the decision is very simple as you don’t have to look up for any other beneficiary.
Things would be relatively difficult if you have children who can be the beneficiary of your assets. Here is when you have to decide over per stirpes or per capita distribution. You have to know about per stirpes vs per capita so that the decision could be simple for you:
Per Stirpes Distribution:
You have to understand the per stirpes definition here. Now, this is a bit complicated as here your asset would get equally distributed. If you have more than 1 child in your home then this is the best distribution to choose from. If you have two children then your asset would be divided into them equally. Now, this would happen if your children would survive. In case any one of them doesn’t survive then you have to look for the grandchildren. If there would not be any grandchildren then the other child would get the entire asset.
Things would be different if there would be grandchildren as well. In this case, the surviving child would get the 50% of your shares and the rest would be divided among the grandchildren. This is how the distribution would continue and this is the real per stirpes definition.
Per Capita Distribution:
If you are wondering about per stirpes vs per capita then you also have to know about per capita distribution. In this scenario, you don’t have to decide on who you would leave your assets to. Your assets would be equally divided into your children who would be alive at the time of your death. You don’t have to think of your grandchildren in this case. If any of your children would not be there then your grandchildren would standby. In this case, your grandchildren would get equal distribution of your assets.
If you would look after both the cases then you would find both the distribution appealing. But, the per capita distribution proves to be more prominent. This distribution lets the grandchildren enjoy the same privilege.
