We draft wills and trusts for many clients who have children and grandchildren.  Clients have specific intentions about which of those descendants receive assets and how they receive them.  A recent court decision showed the importance of using the right (Latin) legal term to achieve this.
David Dooley established the David Dooley Trust, which in part made gifts of remaining trust principal after his death to two of Dooley’s grandchildren, David O’Donoghue and Erin O’Donoghue, per stirpes.  Following Dooley’s death, David and Erin both died without children or lineal descendants, and Erin’s share passed to David.  Sandra O’Donoghue, David’s surviving wife, filed suit seeking interpretation of the trust.  O’Donoghue argued that David and Erin were beneficiaries of the per stirpes gift, and as sole beneficiary of David’s estate she was entitled to take Erin and David’s distributions.  The Oklahoma Supreme Court denied her claim and held that, where a trust makes a distribution per stirpes, the spouse of a beneficiary is not a lineal descendant of the beneficiary under this method of distribution.  O’Donoghue v. Dooley, 2016 OK 110 (Okla. Oct. 25, 2016)
What does this mean for you?  If you have children and, if one of those children is deceased at your death, do you want that deceased child’s share to pass to his or her surviving children?  If so, then your will or trust should say that you leave your assets to your children per stirpes (like David Dooley’s trust).  The Latin term per stirpes (stir’-peas) means “by representation.”  This means that the share left to a person who dies before receiving it will be left to that person’s surviving children – NOT to that person’s spouse unless you specify so.  (This is why David O’Donoghue’s wife was not entitled to his share of his grandfather’s trust.)
However, if you have children and, if one of those children is deceased at your death, do you want that deceased child’s share to pass to his or her other siblings – and not to his or her surviving children?  If so, then your will or trust should say that you leave your assets to your children per capita.  This means that the share left to a person who dies before receiving it will be left to the others in that person’s same generation – NOT to that person’s surviving children or spouse unless you specify so.
So, you see, the use of a particular Latin word can make a world of difference for those who may inherit from you.  Let us help you navigate the terminology to leave a legacy for your family just the way you want to in your will or trust.
To arrange a meeting to discuss your rights and options, contact our office online or call us at 601-987-3000.