Many times, when we send a Will or Trust to a client, the first question the client asks is “What does ‘per stirpes’ mean?” The term per stirpes appears with the word “issue” or “descendants.” Your issue or descendants are your children, grandchildren, great grandchildren, etc. “Per stirpes” literally means ‘by roots or by representation.” Under a per stirpes distribution, each deceased member of one generation is represented by his or her descendants of the next succeeding generation. For example, say a grantor has two children-- a son and a daughter, and leaves a bequest to his or her descendants, per stirpes. At the time of her death, both children predeceased her. The predeceased daughter had one child who survived the grantor. The predeceased son had five children who survived the grantor. The bequest would be divided into two shares. The predeceased daughter’s child would take one share (50%). The five children of the predeceased son would divide what would have been the son’s share if he survived the grantor (10% each).
Contrast per capita distribution with per stirpes distribution. Per capita distribution is equal distribution among a class of people. Using the same facts, but under a per capita distribution, the 6 grandchildren would all receive equal shares. The daughter’s child and the son’s five children would all get an equal share (1/6th each), rather than getting the share that their parent would have received.
On March 30, 2020, the Connecticut Supreme Court decided which generation serves as the root for a per stirpes distribution. In Schwerin v. Ratcliffe, the Hubbell family had two trusts that, when they terminated, went to “the grantor’s issue then living, per stirpes.” The trusts were signed in 1957. The person who signed the Will (“the grantor”), the grantor’s children, and one of the grandchildren, had died. One side of the family argued that the balance should go by representation with the children as the root. The other side of the family argued that the balance should go by representation with the grandchildren as the root. The latter maintained that the words “then living” modifies issue and because the children had died, the children could no longer serve as the root.
The Court ruled that in Connecticut, the children serve as the root for purposes of a distribution to the “grantor’s issue then living, per stirpes.” The court found that the term “issue” indicates that the grantor intended the trust principal to be divided into equal shares on the basis of the number of their children as that was the first generation below the grantor. The court cited to Connecticut’s intestate statute as a guide. The intestate statute sets forth what would happen if there is no will. C.G.S. § 45a-438 refers to the residue after the gift to the spouse going equally to the children and to the legal representatives of the children who may be dead. Thus, our intestate statute relies on the children serving as the root.
The court noted that the words “then living” in the phrase “the grantor’s issue then living, per stirpes” means that a beneficiary must be alive to take his or her share. It does not mean that members of that generation must be alive to serve as the root of the per stirpes distribution. The court ruled that the children could be per stirpal roots, even though they could never receive gifts under the trust.
The court stated that the trusts did not single out the grandchildren as beneficiaries, individually. Instead, the trusts referred to issue as a whole. Thus, the court thought it unlikely that the grantor wanted the grandchildren to serve as the root.
The plaintiffs cited New York law in support of their position. The Court noted that both trusts state that they are governed by Connecticut law, so New York law does not apply. New York statutes also differ significantly from the Connecticut statutes on per stirpes distribution. New York law explicitly provides that the number of shares in the initial division of an estate is to be based on the number of issue surviving at the time of distribution.
November 2020, Issue #29
