Should You Spend Those “Reward” Miles Now?

One of the baseline legal questions to consider when planning for inheritances is determining what can be passed on in the first place. This may seem like an unnecessary question. After all, can’t you pass on all of your assets to another? Not quite. At least, you cannot pass on everything that you control while alive–some things may essentially disappear.

The most obvious categories of items where this might come into play are “digital assets.” This includes items like a Facebook page, blog, Twitter account, online photo album, and many similar items. Many estate planning attorneys discussed these issues in recent years, noting that most decisions hinge on the specific terms and conditions for each social media site. The process for passing on access to these accounts varies. If you place particular value on these accounts, it is important to ask your planners more specifically about these issues to ensure your wishes are followed.

Reward Points After Death
But “digital assets” are not the only items where questions exist about passing them on at death. Consider “reward points” offered for loyalty by airline companies, credits card companies, and similar enterprises. As a recent CNBC story discussed, in many cases those points–or “miles” for airlines–are likely to disappear.

As with most digital assets, whether or not these loyalty points can be passed on at death hinges on the terms and conditions agreed to when first enrolling in the program. Considering the companies craft these terms on their own, it is not surprisingly that they are not very generous when it comes to allowing points to be transferred to friends or family.

Interestingly, this is not a minor issue. According to one research company’s estimates, in the last year figures were available (2011), outstanding reward points had a total value of around $50 billion. That is a large asset to disappear upon death, often amounting to tens of thousands of dollars for single individuals.

As a practical matter, only those with significant loyalty points racked up have likely given much thought to creating a “mileage estate plan.” But it is becoming increasingly important for New Yorkers to consider whether they need to include these details in a will or trust. If so, it is critical to plan carefully to ensure your will provisions comply with the program’s terms and conditions. For example, some programs only allow transfers to certain people (a spouse) or require a death certificate. The contractual arrangements made ahead of time with the company will trump provisions of estate planning documents.

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