Per Stirpes Beneficiary Designations
What is Per Stirpes, and what does it mean? Per Stirpes is a simple way to make sure your family is protected, no matter what happens!
When naming beneficiaries on your life insurance, RRSP, TFSA, or other accounts, there’s an important option many people overlook; and it’s called per stirpes.
It sounds technical, but the idea is simple…and very powerful!
What Does “Per Stirpes” Mean?
“Per stirpes” is Latin for “by branch.”
It means that if one of your beneficiaries passes away before you do, their share automatically goes to their children (your grandchildren), instead of being divided among the remaining beneficiaries.
A Simple Example
Let’s say you have two children:
- Sarah
- John
You name both as 50/50 beneficiaries. If everything goes as planned, they each receive half of your assets.
But what if John passes away before you?
Without per stirpes:
- Sarah receives 100%
- John’s children receive nothing
With per stirpes:
- Sarah receives 50%
- John’s 50% goes to his children
Why This Matters
This small detail can make a big difference. It helps ensure:
- Your assets stay within each child’s family line
- Your grandchildren are protected if something happens to their parent
- Your wishes are carried out exactly as intended
Without it, outcomes can unintentionally favour one side of the family.
When Should You Consider It?
Per stirpes is often a good fit if:
- You have children and grandchildren
- You want each “family branch” treated fairly
- You want a simple, built-in backup plan
If your situation is more complex, other options may be more appropriate—but this is a strong default for many families.
Important Note
Not all accounts or policies default to per stirpes. In many cases, you must specifically request it when naming beneficiaries.
Final Thought
Beneficiary designations are one of the simplest, and most important, parts of your financial plan. A small wording choice today can have a major impact on how your wealth is distributed in the future.