Dividing assets during a divorce creates unique challenges, especially when intangible property becomes part of the equation. Frequent flyer miles and reward points hold significant value but often complicate the property division process. Knowing how courts handle these assets helps spouses prepare for negotiations or court proceedings.
Classifying frequent flyer miles and reward points
Courts typically classify frequent flyer miles and reward points earned during the marriage as marital property. However, courts consider miles or points earned before the marriage or after separation as separate property. Judges examine the timing and source of the rewards to determine their classification.
Challenges in valuing reward programs
Frequent flyer miles and reward points lack a fixed cash value, which makes valuation complex. Each rewards program operates with unique terms and conditions. Some programs allow spouses to transfer or sell points, while others impose strict limitations. Professionals often appraise these assets, or spouses agree on their value, to move forward with the division process.
Methods for dividing miles and points
Spouses or courts employ various methods to divide miles and points. When the rewards program allows, one spouse transfers a portion of the points to the other. Another approach offsets the rewards with other assets, letting one spouse keep the points while the other receives property of equivalent value. Some couples agree to use the points together until they deplete the balance, especially when the program restricts transfers.
Gather documentation for all reward accounts, including balances and program terms, to streamline the division process. Learning the rules of each rewards program enables spouses to achieve a fair division and avoid disputes.
