Rewards Credit Cards

Adding Travel Rewards to Your Will or Trust

For frequent travelers and users of travel rewards credit cards, accumulated points and miles can represent a significant asset that's worth protecting and passing on to your survivors when you die. In fact, you can add reward points or miles to your will or trust, and most rewards programs make it fairly easy to execute the transfer.

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What Happens to Points and Miles When You Die

Reward points and miles are a peculiar type of intangible asset. Unlike your real property, or the funds you have in your deposit or investment accounts, your reward points, and miles are not technically your property. Most airline, hotel and credit card reward programs have lengthy terms and conditions that you must agree to when you join. Among other things, these terms usually specify that your rewards aren't your property.

For example, the rules for United's MileagePlus frequent flyer program specify that "Accrued mileage, Premier (and/or Million Miler) status levels, Premier (and/or Million Miler) benefits, Premier Qualifying Credits and certificates do not constitute property of the Member and are not transferable except as set forth herein."

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But like most reward programs, United allows its miles to be transferred to others when the member dies. United's fine print also says that "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." The fees are unspecified, but there are reports of United representatives waiving the normal transfer fees when the member is deceased.

Most airline and hotel programs have similar terms, which require that a form is submitted with some required documentation before the rewards can be transferred to a designated survivor. However, there are some exceptions. Both Southwest and Delta's frequent flyer programs include terms that specify that points expire when the member dies and cannot be transferred to survivors in a will or estate.

The Steps You Need to Take to Protect Your Points and Miles

Estate planning aside, it's always important to keep track of your reward points and miles. Some people use a spreadsheet, while others use a tracking service like AwardWallet. Either way, it makes sense not only to keep your account numbers and passwords in a secure place but also to let your family members know how to access it in case they need it for any reason. In fact, some people authorized family members to use their points or miles on their behalf.

And just like any other assets, it's important to indicate your intentions in your will or trust. For example, you can include a note in these documents leaving these rewards to one or more survivors, or to a single executor to use as he or she feels would have been your intent.

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Since airline and hotel rewards can usually be redeemed for travel reservations in other people's names, some survivors choose to redeem the remaining points and miles without informing the airline or hotel of the member's death. Frequent flyer programs like Delta and Southwest that don't allow rewards to be transferred offer survivors little incentive to inform them of a member's passing. In fact, there are reports of the airline's own representatives candidly offering this advice to customers.

When planning an estate, travel rewards are frequently overlooked, and that's unfortunate. By taking the time to organize all of your accounts, and declaring your intentions in your will or trust, you can ensure that your survivors retain access to valuable rewards.