What is the difference between per stirpes and per capita beneficiary designations?

These terms decide what happens to a beneficiary's share if that person dies before you. Per stirpes (by branch) means a deceased beneficiary's share passes down to their own descendants, so if you name three children per stirpes and one dies leaving two kids, those grandchildren split the deceased child's third. Per capita (by head) means the share is instead divided among the surviving named beneficiaries, so the other two children would each get half and the grandchildren get nothing. Per stirpes is common when you want money to stay within each child's family line; per capita keeps it among the surviving named individuals. Choosing the right one prevents unintended disinheritance of grandchildren, so state your preference explicitly on the beneficiary form.