Per Stirpes vs. Per Capita Beneficiary Designations in Ontario: What's the Difference?

If you're naming more than one beneficiary on a will, RRSP, RRIF, TFSA, or life insurance policy, you may be asked to choose between "per stirpes" and "per capita" distribution — two Latin terms that quietly control what happens if one of your beneficiaries dies before you do.

Most people skip past this choice without understanding it, or don't realize a choice is being made at all. The per stirpes vs. per capita beneficiary designation you pick in Ontario only matters once someone predeceases you, but when it matters, it can change who actually inherits a share worth having.

This article breaks down what each term means, where the choice comes up, and how to think through it.

What "Per Stirpes" Means

"Per stirpes" is Latin for "by the branches" or "by representation." Under a per stirpes designation, if a named beneficiary dies before you, their share doesn't get absorbed by the other beneficiaries — it flows down to that beneficiary's own children (or other named substitutes), branch by branch.

What "Per Capita" Means

"Per capita" is Latin for "by the head." Under a per capita designation, if a named beneficiary dies before you, their share is generally redistributed among the surviving named beneficiaries at that same level, rather than passing down to the deceased beneficiary's own children.

A Side-by-Side Example

Say you name your three adult children as equal beneficiaries, and one of them predeceases you, leaving two children (your grandchildren) of their own.

Neither outcome is "wrong" — they're just different, and the difference can matter enormously to a grandchild who assumed they'd inherit through their parent.

Where This Choice Comes Up

• In a will — when drafting language for a gift to a group of people, or to "my children," or to "my issue."
• In beneficiary designations — on RRSP, RRIF, and TFSA forms, and on life insurance applications, some of which let you specify per stirpes or per capita distribution, or default to one without asking.

Why the Default Matters

Some forms and even some wills default to per capita, or simply don't address the possibility that a beneficiary might predecease you at all. As a general rule of wills law, if a gift lapses because a named beneficiary died first and no substitute is named, it typically either falls back into the residue of the estate, or — if it was already part of the residue — may end up distributed as though there were no will at all for that portion. Ontario's Succession Law Reform Act softens this in one common case: unless the will shows a contrary intention, a gift to the testator's own child, grandchild, brother, or sister who dies first leaving a spouse or issue surviving generally does not lapse — it passes instead to that person's family. But that statutory backstop does not reach every beneficiary or every kind of designation, and leaning on it means leaving the outcome to a default rule rather than to your actual wishes. That uncertainty is exactly what naming per stirpes or per capita is meant to avoid.

Choosing Between the Two

Ask yourself:

• [ ] Do I want a deceased beneficiary's own children to inherit their share, or should it go to my other named beneficiaries instead?
• [ ] Are my beneficiaries roughly the same generation, or do they span different branches of my family?
• [ ] Does my current will or designation form actually specify which method applies, or is it silent?
• [ ] Have I made the same choice consistently across my will and each of my beneficiary designations?

There's no universally "correct" answer. A per stirpes approach tends to suit people who want to keep an inheritance within a specific branch of the family even if that branch's original beneficiary is gone. A per capita approach tends to suit people who are comfortable with the share simply staying among the people they named directly.

Frequently asked questions