Per Stirpes or Per Capita

It seemed to Ben that sibling strife dominated his law practice these days. He and Sam Nixon MD were mulling the causes as at 5pm each nursed his three fingers of The Macallan in Ben’s library-conference room. The subject of their mulling was the Tucker family, its members long patients of Sam and clients of Ben.

Fred Tucker, patriarch, had been to see Ben this morning, the subject of their meeting, competing demands by Fred’s sons Rufus and Clint. The root of the problem was this: Rufus had four children, Clint only one.

Rufus had urged Fred to divide his estate four shares to him, one share to Clint, so the five grandchildren would ultimately share equally Fred’s considerable wealth. “You know you love your grandchildren the same,” Rufus had argued to Fred. In response Fred had grunted noncommittally.

Clint, in sharp contrast, had argued, “Dad, just because Rufus opted for four kids shouldn’t penalize me, you and mom always told us you loved us equally. Certainly you will divide your assets equally between Rufus and me.”

Again, Fred had grunted, wishing his wife Mary were still around to help him solve the dilemma.

“There is no right or wrong answer, Fred, it’s just a matter of what you want to do with your assets, what you alone think is fair. You do not have to leave a cent to any child or grandchild. And you do not have to tell anyone what you decide to do while you are alive. Most client’s don’t,” Ben had counseled.

Fred went away from Ben’s office mulling that advice. A week later he was back.

“Here is what I want to do,” Fred said on his return.

So Ben drafted Fred’s will and trust agreement to leave Fred’s assets as Fred desired.

Fast forward two years. Fred died in his sleep of a heart attack. Ben and Sam were Honorary Pallbearers at Fred’s graveside service on his Oh-My-Gosh Plantation, where Fred’s ashes were buried beneath sprawling Live Oaks whose limbs formed a canopy above Fred’s resting place. Two days later Fred’s descendants, two sons and five grandchildren, gathered in Ben’s library-conference room to hear Fred’s will and trust read.

Here is what they heard (Sam Nixon was recording the happening on a tiny digital video camera).

Ben read from a podium to the gathering, seated around the conference table:

“My Trustees shall divide the trust assets first into two equal shares, Share One and Share Two. Share One shall be distributed equally to my Grandchildren who survive me, per capita. Share Two shall be distributed equally to my sons Rufus and Clint, the share of either of them who does not survive me to pass to his descendants, per stirpes.”

Ben had first explained that thanks to the combined exemptions from estate tax of Fred and his widow (she had left Fred all she had so Fred got her estate tax exemption) and to Fred’s generation-skipping tax exemption, the $23 Million estate of Fred would pass transfer tax free.

Fred had followed Rufus’s position for half his wealth, and Clint’s for half, except he followed neither’s about their joint wish that they get it all, and the grands get parts only after their parent, Fred’s son, died, and only if Fred’s son chose to leave his share down the bloodline and didn’t spend it.

Ben sat down and waited. The grands rose grinning, the sons furious. Soon they were gone, a surprised lot. Ben broke out The Macallan for the curmudgeons to enjoy their sundowners. “Ole Fred was a fox,” Sam said in admiration.

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