An advantage of thorough and applicable Petroleum Landman Training comes from highly experienced oil and gas attorneys, senior right-of-way personnel, and senior landmen (See: The Advisory Board of the Institute of Energy Management) who, in their career, have dealt with certain “landmines” (like this subject) and how they resolved them.
As a Petroleum Landman, have you ever run across an issue regarding a Will drafted as a ‘Strict Will Per Stirpes’, ‘Will Per Stirpes’, Will Per Modern Stirpes’, or a Will that was drafted as a ‘Will Per Capita’? Do you know the difference and which states recognize them?
Strict Will Per Stirpes
- When a decedent’s Estate is pre-determined to be distributed upon the death of the Testator Per Stirpes to each branch, children of the Testator – not the spouse are to receive an equal share of the Estate. In other words, this division treats each line of the descendants equally or is divided equally at the first generation.
Another way to put it is, when the Heir in the first generation of a branch predeceases the Testator, the share that would have been given to that Heir would be distributed among the Heir’s children in equal shares. This is also known as ‘right of representation’ distribution.
An example of Strict Will Per Stirpes:
- Suppose that the Testator A’s Will specifies that his or her Estate is to be divided among his or her descendants, in equal shares Strict Per Stirpes.
- Testator A has three children, B, C, and D. However, B has died before A. Child B has left two children (grandchildren of A), named B1 and B2.
- When A’s Will is executed, under a Per Stirpes division, C and D each receive one-third of the Estate, and B1 and B2 each one sixth, because their ‘branch’ of the family has received on equal share.
Another example of Strict Will Per Stirpes
- Similarly, if grandchild B1 had also died before A but left two children, B1a and B1b, a Per Stirpes division, C and D would each receive 1/3rd and 1/6th would go to B2.
- The 1/6th allocated to the B1 branch would be divided B1a and B1b, with each receiving 1/12th of the original Estate.
Modern Per Stirpes is similar to Strict Per Stirpes
- Distribution of assets but is applied in the event that more than one of the Testator’s children is deceased at the time of the death of Testator A.
- The difference in this event is that Modern Per Stirpes allows all living children of the deceased first-generation children (Testator’s grandchildren to share equally).
An example of a Will – Modern Per Stirpes
- Suppose that Testator A’s Will, specifies that his/her Estate is to be divided among his/her descendants living at A’s death in equal shares, modern Per Stirpes. Testator A has three children, B,C and D. However, B and C have died before A. Child B has left two children (grandchildren of A), named B1 and B2. C has left one child (grandchild of A) named C1. When A’s Will is Probated under a Modern Per Stirpes division, D receives 1/3rd of the Estate, and B1, B2 and C1 share equally in the total amount of B and C’s combined share. Equal Shares – not just limited to their prorate share of their parent’s interest only
Will Per Capita
Similar to the Modern Per Stirpes but differs in the percentage of the Estate being distributed to non-children of the Testator – nearest living relative (similar to Intestate Succession).
- For example, the Estate is divided into equal shares at the generation closest to the deceased child (like in Per Stirpes) with surviving Heirs - If there are two or more primary Beneficiaries and each has children, it is important to specify in the Will that all of the children of all of the deceased first generation’s children are to share equally in the combined shares of their parents (deceased first generation) rather than only sharing equally in their respective parent’s portion. The ultimate words are “combined shares”. Combine all of the interest and divide it equally between all of the grandchildren and D’s mother (B1, B2, C1 and D’s mother) = 1/4th of the total Estate.
The Per Capita scheme
- This would differ if C pre-deceased with one child, C1. Under Per Stirpes, C1 would receive all of C’s 1/3 while B1 and B2 each received 1/6 (half each of B’s 1/3 share).
- Under per capita, C1’s share is combined with B1 and B2’s share (2/3’s total) and divided equally among the three.
- This Per Capita sharing is very similar to the Modern Per Stirpes.
- The difference between the two is the introduction of others rather than children (D’s Mother, for example).
Under New York law, the number of branches is determined by reference to the generation nearest the Testator which has surviving lineal descendants (first parents, then siblings).
This method is actually applied by the states of Alaska, Arizona, Colorado, Hawaii, Maine, Michigan, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Utah, and West Virginia.
Another example of Per Capita distribution
- This would be if all three children (B, C, and D) have passed away prior to the death of Testator A. B and C have children (all living at that time) but D has no Will and no living relatives except the children of B and C.
- D’s interest would be dropped into the pool of interest belonging to B and C then equally divided among the living grandchildren.
- Share Equally: Grandchildren B1, B2 and C1 share equally in the Estate of CHILD B, C and D since D has no children, parents or siblings living at the time of the death of Testator A.
- Note that the spouses of the children (B, C, and D) are not considered. Spouses are not a part of the branch.
- Therefore, even if B, C or D died leaving a spouse as well as children, all (100%) of the assets of the Testator A pass to the children and nothing passes to the spouses of A’s children B, C and D.
- From the example above, if A’s child B died before A’s death, A’s grandchildren B1 and B2 would each receive half of B’s share. Even if B had a living spouse at the time of A’s death, he/she would receive nothing from A’s Estate.
The Petroleum Landman School, Professional Landman Schools, and the Institute of Energy Management’s courses deal with many other critical issues to help a Petroleum Landman become more aware of things which could become critical issues.
Please visit www.instituteofenergymanagement.com for a complete list of the most comprehensive and applicable Petroleum Landman training courses available.