An insured names 'my children, per stirpes' as beneficiaries. At the insured's death, two children are alive and a third child has predeceased the insured, leaving two grandchildren. How are the proceeds divided?

Why A is correct

Per stirpes divides the proceeds into branches by the named class - here, three children create three branches of one-third each. The two living children each take their full one-third share. The deceased child's one-third branch share passes to that child's descendants, divided equally between the two grandchildren, giving each one-sixth. This preserves the deceased child's branch share. If the designation had been per capita, only the two surviving children would receive equal shares, and the grandchildren would receive nothing.

Why the other options are wrong

• B) The grandchildren do receive the deceased branch's share under per stirpes. Ignoring them misstates the distribution and defeats the branch method.
• C) Equal division among all living people is per capita at the headcount level. Per stirpes divides by branch instead of by individual.
• D) The grandchildren split the deceased child's branch share, which is one-third of the total proceeds, not the entire proceeds.

Memory hook

Per stirpes means count branches first, then split within each branch.