Some California residents who are either preparing to divorce or already involved in the process may wonder what happens to assets such as frequent flier miles. It is common for spouses to negotiate communityproperty division for assets such as stock portfolios, cash, real estate and even tangible collections such as art, guns or wine. However, spouses sometimes accumulate large amounts of frequent flier miles or rewards points during the marriage as well, and these miles have value. For example, hundreds of thousands of miles can translate to valuable first-class tickets.
There are some rewards programs with terms and conditions specifically stating that miles are not transferable to a spouse in the event of divorce. The first step for any spouse who owns or would like to obtain these miles is to read the terms and conditions to see if the points can be transferred. If not, the spouse has the option of trying to calculate the cash value of the points and then arguing for that amount as a different portion of the settlement. Some programs make this easier by providing a cash value for points.
Another option is to ask the airline to divide the miles equally into two separate accounts. That option may include fees for transferring the rewards or extending expiration dates, so spouses may want to discuss a plan for handling these fees in advance.
When divorcing individuals are trying to decide how to divide property, a family law attorney may be able to help. The attorney may have the ability to negotiate with the company on behalf of clients in an effort to reduce or avoid fees, or the attorney may also be able to assist with placing a value on intangible community property and negotiating a fair resolution.
Source: Forbes, “Divorce: Who Gets The Air Miles“, Jeff Landers, June 26, 2013