Per Capita

Per Capita

General Overview:
Per Capita is a Latin term meaning "by the head" and is commonly used in legal contexts concerning inheritance and distribution of assets. In estate planning and probate, it refers to a method of distributing an estate among beneficiaries, where each beneficiary receives an equal share.

Detailed Explanation:
When a decedent’s estate is divided per capita, each designated beneficiary receives an equal portion of the estate regardless of their familial relationship to the decedent. This method is often contrasted with per stirpes, which distributes the estate based on the generational lineage of the beneficiaries.

For example, consider an estate worth $1,000,000 to be divided among three children: Alice, Bob, and Charlie. If the estate is distributed per capita, each child will receive $333,333.33.

If one of the children had died before the decedent, and the estate was to be distributed per stirpes, Charlie would receive his share, while Alice and Bob would each receive their shares, and Charlie would inherit his deceased sibling’s share distributed to his heirs. This distinction is significant in estate planning as it impacts how the decedent’s wishes are enacted in terms of who ultimately benefits from the estate.

In Texas, it is essential to clearly specify whether distributions are to be made per capita or per stirpes in the will or trust documents to avoid confusion among beneficiaries and ensure that the decedent’s intentions are honored.