As an estate planning lawyer, one of my principal objectives in drafting a client's Will or Trust is to name the beneficiaries which the client wants to receive their estate. Often this will be a spouse or children and in some cases, other family members. What happens if the person named dies before the person who established the Will or Trust? Does the intended devise (gift) go to the deceased beneficiary's children or to someone else? The answer is, "it depends."
One common way of naming beneficiaries is to state that you leave your estate to your beneficiaries "per stirpes." This Latin phrase literally translates as "by the roots." It means that if a beneficiary predeceases the person creating the Will or Trust, the share of that deceased beneficiary will go down to the next level-i.e. to the children or grandchildren, as applicable. The persons at that next level down take as a group representing the deceased beneficiary. For this reason, the phrase per stirpes is sometimes referred to as taking by "right of representation." The group represented takes the proportional share of the deceased beneficiary.
For example, consider a situation where Sheri Doe executes a Will leaving all of her estate as follows: "To my children, Thomas Doe, Susan Doe, and Cathy Doe, in equal shares per stirpes." If all three children are living when Sheri dies, then each child receives one-third of her estate. But if Thomas dies before Sheri and he leaves two children, then Thomas's children will each receive one-sixth (Thomas' one-third share divided into two shares). Thomas' children take his share by representation.
When having your Will or Trust prepared, you should make sure that your lawyer addresses what happens if one or more of your beneficiaries die before you. You can name beneficiaries per stirpes or not, but make sure this is addressed. If you already have a Will or Trust, do you have per stirpes?