Blog
How to Divide Frequent Flyer Miles and Credit Card Points in Divorce
Contents
How to Divide Frequent Flyer Miles and Credit Card Points in Divorce
Going through a divorce can be really tough, especially when it comes to splitting up assets like frequent flyer miles and credit card points. Even though they might not seem like a big deal, for a lot of folks, those miles and points represent real value that was earned during the marriage. So how do you go about dividing them up fairly?
Well, first off, know that in most states, miles and points are considered marital property, just like the cash and investments. That means they’re on the table when it comes time to split everything 50/50 or whatever percentage you agree to. Of course, you gotta remember to bring them up in the first place! A lot of people forget about miles and points ’cause they’re not as obvious as the house or retirement accounts. But they can add up to thousands of dollars of value, so don’t let ’em slip through the cracks!
Strategies for Splitting Miles and Points
OK, so once you’ve identified the miles and points accounts, here’s some ideas for dividing them up:
- Cash out the points and split the money. This works well if you’ve got flexible/cash-back points from cards like Chase Sapphire or Citi DoubleCash.
- Alternate choosing accounts. Take turns picking which frequent flyer or hotel program you want the points from.
- Divide by number of points. Calculate the total points and split ’em right down the middle.
- Assign a dollar value per point. Come up with a reasonable redemption value per point and divide the total dollar amount.
The most fair method is probably to cash out the points and split the dollars. But if you’ve got miles with a specific airline you want to keep, then alternating choosing accounts could work. The key is communicating openly and compromising to find an equitable solution.
What the Law Says
When it comes to the legal side of things, most states treat miles and points as marital property since they were accumulated during the marriage. That means they are subject to equitable distribution just like other joint assets. There’s been some key court cases establishing this precedent:
- In re Marriage of Heinze – An Indiana case recognizing frequent flyer miles as marital property.
- In re Marriage of Nevarez – A California case dividing credit card points.
So if you can’t agree on splitting the miles and points, the court can step in and order an equitable division based on these legal precedents. But it’s always better to try and negotiate a compromise settlement if possible.
Bottom Line
Dividing up frequent flyer miles and credit card points during divorce ain’t always easy. But with some creativity and compromise, you can split them fairly. Remember to identify all the accounts, use an equitable method like cashing out or alternating, and follow the legal precedents that they are marital property. With good communication and willingness to find a win-win, you can split the miles and avoid a court battle over rewards points!
Sources: