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Estate Planning for Frequent Flyer Miles

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It is simply true that Frequent Flyer miles and other rewards programs and points systems can be very valuable resources.  Numerous credit card companies give tens of thousands of miles or points for opening an account and then give miles or points for nearly every purchase. According to numerous studies, the typical frequent flyer mile is worth 1.5 cents. That may not sound like a lot, but it means a balance of 100,000 miles is worth $1,500. Since it's not uncommon for Frequent Flyer account holders to have hundreds of thousands of miles or points in their accounts, these assets can often be worth many thousands of dollars.

A great many people who travel frequently, whether the travel is for business or pleasure can build up a lot of value in these types of programs. That is why so many of them want to include their Miles in their estate plan; they would like to bequeath them to others who can use them. Of course, it's important to keep in mind that each program has its own rules, so whether you may or may not be able to dispose of your miles (or other rewards) at death will depend on the terms of your contract with the company administering the account.

Is Leaving Miles to Heirs Even Possible?

For frequent airline travelers, Frequent Flyer Miles may be a major estate planning concern for when you pass on. As noted, they could be worth thousands of dollars, making them too valuable to simply watch them disappear when you're gone. However, whether or not you can give them to loved ones will depend greatly on airline policies or whims, which often ultimately decide what can happen. While the law doesn’t consider airline miles assets that can be bequeathed directly to heirs, there are still some steps you can take to help ensure your miles live on.

Of course, it’s important to know the airline policies in question. Some of the most common rewards programs include the following (including the language pertaining to their transferability upon death):

  • Delta Airlines SkyMiles: “Except as specifically authorized in the Membership Guide and Program Rules or otherwise in writing by an officer of Delta, miles may not be . . . transferred under any circumstances, including . . . upon death. . . . ” 
  • United Airlines MileagePlus : “In the event of the death or divorce of a Member, United may, in its sole discretion, credit all or a portion of such Member’s accrued mileage to authorized persons upon receipt of documentation satisfactory to United and payment of applicable fees.” 
  • Southwest Airlines Rapid Rewards:“Points may not be transferred to a Member’s estate or as part of a settlement, inheritance, or will. In the event of a Member’s death, his/her account will become inactive after 24 months from the last earning date (unless the account is requested to be closed) and points will be unavailable for use.” 
  • American Airlines AAdvantage: “Neither accrued mileage, nor award tickets, nor status, nor upgrades are transferable by the member (i) upon death . . . . However, American Airlines, in its sole discretion, may credit accrued mileage to persons specifically identified in court approved divorce decrees and wills upon receipt of documentation satisfactory to American Airlines and upon payment of any applicable fees.” 

As you can see, each airline’s policy terms vary greatly, and they often vary even more, depending on your agent. That said, however, despite the contracts, in practice most airlines will allow a transfer to next of kin or as specified in a Will.  Therefore, it may be a good idea to include your Frequent Flyer Miles in your Will or Estate Plan, anyway.

How to Include Miles in Your Estate Plan

Because frequent flyer miles and other reward program points are intangible assets, you cannot dispose of them via a tangible personal property list referenced in a Will or trust.  They would have to be disposed of in the Will itself.  Keep in mind, though, you will have to rely on the company’s kindness and customer service commitment and hope they won't strictly enforce the terms of the contract to the letter.

To summarize, even though most airline policies claim they won't allow Miles transfers after death, the reality is somewhat different in practice, with airline employees often having the discretion to approve the transfer, to make a customer happy. Still, there’s no sure way to know whether your airline will work with your loved ones regarding the transfer of your miles. It might be far better to use your reward miles and points as you accumulate them than to stockpile them, especially if you suspect they may be forfeited upon your death. One way to increase the odds that your miles get transferred according to your wishes is to include a provision in your will that makes everything clear. This step is especially important if your airline requires a copy of a will as documentation, but it can be helpful anyway.

One other workaround is to leave your account number, login and password to the person you want to be able to use your miles. Some airlines permit such transfers and usage of miles after the account holder’s death. 

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