Definition
A beneficiary instruction, Latin for by branch, meaning that if a named beneficiary dies before you, that person's share passes down to their descendants rather than being split among your surviving beneficiaries. The alternative, per capita, divides everything among the beneficiaries who are still living. The words appear on wills, trusts, and retirement account beneficiary forms.
Why it matters
The choice decides whether a grandchild whose parent died young inherits anything at all. Beneficiary forms on 401(k)s and IRAs override the will, so the designation on each account is where this matters most.
Example
A widow names her three children as equal beneficiaries of a $300,000 IRA, per stirpes. One son dies before her, leaving two children. At her death the two surviving children each receive $100,000 and the late son's two children split his $100,000, getting $50,000 each. With a per capita designation instead, the two surviving children would take $150,000 each and the grandchildren nothing.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.