Susan stared at her father’s Last Will and Testament and groaned. “I know I am supposed to be the executor of Dad’s will, but some of this makes no sense.”
“How so?” asked her husband, Tom.
“Well, he makes these very specific bequests of airline miles and hotel points, even credit card reward points. But I’m pretty sure all of those things belong to the airlines, hotels, and credit card companies after someone dies. I can’t imagine why his lawyer would even suggest such a thing.”
Tom laughed. ‘Well, he was pretty generous with those things when he was alive. Remember when he used those airline miles to buy tickets for a family vacation? And he got you that free fancy mixer with some deal with his credit card company? Maybe he thought they still had value after his death.”
Susan chuckled. “And he had that wallet thingy on the Internet that he used to check all the time. If he thought the totals were wrong, he’d call up the company and read them the riot act.”
“Well, you know, maybe he knew something we didn’t. God knows, he read every document every company sent him. Maybe he could leave those points to his heirs.” Tom looked at Susan. “I think you need to contact all those companies and find out. It would be shame to just walk away. Some of those points are pretty valuable.”
Susan nodded. “I guess. I am sure he has his account information for that wallet thingy around here somewhere. I’ll look in his desk and his safety deposit box. Maybe I’ll find it.”
Airline miles, hotel points, and credit card rewards do have value. That’s why it’s important to learn how they will be treated upon death and what steps can be taken to ensure that they remain available to heirs. Some general rules:
- Airline miles. Generally, miles awarded by airlines for past travel cannot be bequeathed by will, and in most cases, when a customer dies, the airlines close the account and take possession of any remaining miles. However, miles can be redeemed for use by others, even if the owner is not traveling with those people, and in some cases, airlines will permit the transfer of points to heirs if asked. There are no consistent rules among airlines. Each applies a different set of procedures.
- Hotel points. As a general rule, hotels do not permit hotel points to be used by anyone other than the owner. However, there are always exceptions. Sometimes, the points can be transferred to other account holders within the hotel chain. In other cases, the transfer is limited to a spouse or domestic partner. Each hotel chain applies a different set of rules.
- Credit cards rewards. In most cases, once an account is closed, all reward points that have accumulated are forfeited to the credit card company. That means it is incumbent on heirs to ensure the account remains open. In some instances, a credit card company may permit an heir to assume control of an account, retaining the points. However, in most cases, reward points cannot be transferred to another person or account.
Despite the stated rules, there are several steps that can be taken to retain ownership for the benefit of heirs:
- Check the customer contract. Some contracts clearly state how miles, points, and rewards are dealt with upon the holder’s death. In some cases, a holder may be required to specify a beneficiary through the company or by will. In other cases, the holder may be required to open a joint account or initiate transfers prior to death.
- Even if the corporate contract says all miles, points, or rewards belong to the company, some will agree to transfer them to heirs upon request. The old adage applies: “You don’t know until you ask.”
- Consider making gifts during your lifetime. Sometimes, airline miles and hotel points can be used to fund travel for other family members. For example, airline tickets may be purchased for others by the owner of the miles and similarly, hotel reservations may be secured using hotel points if the reservation is made in the name of the account holder. Credit card rewards may be redeemed for gifts or discounts for others. Lifetime gifts avoid any restrictions on the use of miles, points, and rewards, and permit the owner to receive full value while benefiting his or her heirs.
- Create joint accounts. By adding the name of an heir to an account, all remaining miles, points and/or rewards will remain in the account upon an owner’s death. That permits the survivor to continue to have access to the account and permits them use without restriction.
- Transfer existing miles, points, and rewards into a general account with the same company. For example, create an account in the name of heirs or a trust.
- Set up online accounts. Online accounts ensure that information is easily accessible. AwardWallet, for example, keeps all miles, points, and rewards balances organized and easy to access. They can be redeemed and moved without intervention from the originating companies. In addition, multiple people can be provided access to the account—during the account owner’s lifetime and/or after death–preventing some of the current problems with inheriting or bequeathing those assets.
If a testator wishes to bequeath airline miles and hotel points to a charity that is in need of such support, such as the Make A Wish Foundation or the Honor Flight Network, the testator should contact the charity and determine the best approach to transferring those assets. Usually, such organizations already have systems in place to accept and facilitate transfers.