For many people, airline miles and credit card reward points have become a meaningful part of everyday life. Years of travel, hotel stays, and credit card purchases can add up to substantial rewards balances.
But what happens to those rewards when someone dies?
The answer is not always as simple as “they become part of the estate.” Airline miles and credit card rewards are usually governed by the terms of the applicable loyalty or rewards program. Those terms may limit whether points are considered property, whether they can be transferred, and what an executor, personal representative, or trustee can do after death.
That makes rewards accounts worth considering as part of a well-organized estate plan.
Are Airline Miles Part of Your Estate?
A common misconception is that anything with financial value automatically passes to a person’s beneficiaries under a will or trust. Airline miles do not always work that way.
For example, American Airlines’ AAdvantage terms state that accrued AAdvantage rewards and benefits do not constitute property of the member or the member’s estate. Unless American Airlines otherwise permits, an AAdvantage account may be terminated after the member’s death, and the member’s AAdvantage miles and Loyalty Points may be forfeited. [1]
American Airlines does, however, provide a limited possibility of post-death transfer. Under certain circumstances, and in American Airlines’ discretion, eligible AAdvantage miles or rewards may be credited to individuals identified in documentation satisfactory to American Airlines. The airline may require documentation such as a declaration supporting the transfer request, a copy of the death certificate, and proof of legal authority. [1]
Delta’s SkyMiles program takes a more restrictive approach. Delta’s current rules state that SkyMiles are not the property of the member and generally may not be transferred, including by operation of law or upon death. Delta also reserves the right to close an account when a member is deceased, and miles are forfeited when the account is closed. [2]
The key estate-planning point is this: a provision in a will or trust saying who should receive airline miles may express your wishes, but it may not be enough by itself to require the airline to transfer those miles. The program terms often control what the company will allow.
What About Credit Card Reward Points?
Credit card rewards can be handled differently, and the rules vary by issuer and by rewards program.
American Express Membership Rewards provides one example. The current Membership Rewards terms state that points do not belong to the cardholder and are not the cardholder’s property. The terms also state that if American Express cancels a product for any reason, including the cardholder’s death, the points in the Rewards Account are generally lost. However, depending on the particular product, the executor of the estate or personal representative may be able to make a one-time points redemption after the cardholder’s death. [3]
Chase Ultimate Rewards provides a different example. Under the current Chase Sapphire Preferred with Ultimate Rewards program agreement, if Chase is notified of the cardholder’s death, the points are automatically redeemed for cash in the form of an account statement credit. The agreement also states that, unless required by law, points are not the cardholder’s property and cannot be transferred by operation of law, such as by inheritance. [4]
These examples show why there is no universal rule for credit card rewards. One program may allow a limited redemption by an estate representative. Another may automatically convert points to a statement credit. Another may have different rules entirely.
What Should You Do?
If you have accumulated a meaningful number of miles or points, they should at least be considered when reviewing your estate plan.
The first step is simply knowing what you have. You may have airline accounts, hotel loyalty accounts, and credit cards with valuable rewards balances. Your family or the person administering your estate may not know those accounts exist.
Consider keeping an inventory of important rewards accounts. The inventory can include the program name, account number or username, and enough information for your executor, personal representative, or successor trustee to identify the account and contact the company.
Avoid placing passwords or other sensitive login information directly in your will or trust. Those documents may become part of a court file or be shared with multiple people. Instead, consider using a secure password manager or another secure method that allows your fiduciary to locate information lawfully and safely when needed.
It is also important to review rewards-program terms periodically. These rules can change, and the current terms at the time of death or account administration may affect what options are available.
Don’t Assume Your Will or Trust Controls Everything
Your will or trust is an important part of your estate plan, but it may not override the terms of a loyalty or rewards program.
Imagine that you have 200,000 airline miles and your will says your daughter should receive them. If the airline’s terms say miles are not transferable at death, or that any transfer is subject to the airline’s discretion, the provision in your will may not guarantee that your daughter receives the miles.
That does not make estate planning irrelevant. In fact, it makes planning ahead more important.
Your estate plan can help ensure that your fiduciaries know the accounts exist, know where to find account information, and understand that each company may have its own procedure. They can then contact the appropriate company, provide required documentation, and determine whether the rewards can be transferred, redeemed, converted, or will be forfeited.
A Few Extra Miles Can Go a Long Way
Airline miles and credit card points may not be the first things that come to mind when you think about estate planning, but they can represent meaningful value.
More importantly, they are a reminder that estate planning is about more than houses, bank accounts, and investments. A well-rounded plan considers the many different types of accounts and benefits that make up your life today.
So, the next time you check your rewards balance, take a moment to consider what would happen to those miles or points if you were no longer here.
Your estate plan should help your fiduciaries identify the accounts that matter to you, even the ones you might not immediately think of as traditional assets.
Because the best time to understand what may happen to your rewards is before your family has to figure it out.
Footnotes