Frequent Flyer Miles and Hotel Points: Where do they Travel to When You’re Gone?July 31, 2013 – Articles Estate Planning Blog
This Friday, I am heading out of the Philadelphia suburbs for a week with my wife and four children to Rocky Mountain National Park for our summer adventure. As one could guess, moving a family of six across the country for a week costs a few bucks, so it’s always around vacation time when I envy my friends who are able to use their frequent flyer miles or hotel points to finance an entire trip to Europe.
No doubt, frequent traveler perks are handy to have, whether earned or inherited.
That’s right, I said inherited. I recently had the need to investigate for a client with significant point balances how frequent flyer and hotel points are transferred at death. I was interested to learn that every company has a policy governing the transferability of these points and that the policies vary significantly. For example, American Airlines’ policy states that accrued mileage is not transferrable upon death, but American Airlines may, in its sole discretion, credit accrued mileage to persons specifically identified in court approved Wills upon receipt of documentations satisfactory to American Airlines. In contrast, Southwest Airlines does not permit the transfer of awards points on death. American Express also permits accumulated points to be transferred on death.
Here is a suggested list of best practices for you to consider when dealing with awards points:
- Make sure you identify all of the possible rewards points your client may have accumulated. Consider airlines, hotels, credit cards and rental cars.
- Always read the policy of the awarding company to make sure you comply with rules governing transfer of balances on death. All of these policies are on line so they are easy to track down.
- When in doubt, make specific reference in the Will of the account and who is to receive the balance upon death. This seems to matter to some companies.
- For closely held business owners, make sure you know whether you client has an individual account or whether their account is in the business’s name. The transfer rules may differ in each situation.
- Add this item to you estate administration checklist as an asset to discuss with your client and chase down. In many cases, the asset may have significant value and the rules governing transferability may require the executor to act quickly to claim the balance.