Can You Leave Your Airline Miles to Your Kids?

Most of us have a mental list of the assets that make up our estate.

A house.

A retirement account.

Bank accounts.

Investments.

Maybe a family cabin.

But what about your Alaska Airlines miles?

Your Delta SkyMiles?

Your Marriott points?

For some frequent travelers, these accounts are not just an afterthought. A lifetime of business trips, vacations, and credit card spending can result in hundreds of thousands, even millions, of reward points.

Those points may represent thousands of dollars of travel value.

So what happens when you die?

The answer surprises many people.

You may not actually "own" them.

Your Points Are Not Exactly Like Money

Although we think of airline miles and hotel points as assets, legally they are usually governed by the terms and conditions of the loyalty program.

Those agreements often say things like:

1. points have no cash value;

2. they are not your property;

3. they cannot automatically be inherited; and

4. the company may cancel them when the account holder dies.

   
   

In other words, your frequent flyer account is not the same as a bank account.

Your will or trust saying "I leave everything to my children" does not mean your kids get your miles. 

But That Doesn't Mean Planning Is Impossible

Different companies have different rules.

Some programs allow transfers after death.

Some require a death certificate and proof that the person requesting the transfer is the legal representative of the estate.

Others say transfers are not permitted but reserve the right to make exceptions.

This means your successor trustee or personal representative needs two things:

Knowledge that the account exists.

and

Access to the information needed to administer it.

In other words, a million unused points do not help anyone if nobody knows they exist.

My go-to airline is Alaska and they do have this concept. It’s called “Memorial Miles.” I haven’t seen the program in action, but it’s supposedly one of the more user friendly systems.

Add Reward Programs to Your Digital Asset List

One of the easiest estate planning steps is also one of the most overlooked:

Create a travel and rewards “assets” inventory.

Include your: Airline accounts, Hotel programs, Credit card reward programs, Cash-back accounts and Travel credits.

Don’t store your passwords in this list. Only list the account and user names. This is a perfect document to keep in your estate planning notebook that includes the full set of your original documents. 

Ultimately, you want to make sure that your fiduciary knows:

1. what accounts exist;

2. where login information is securely stored; and

3. who has legal authority to access digital accounts.

The Vacation Strategy

There is also another solution, and I like this solution the best:

Just use them.

Estate planning is not only about transferring wealth after death. It is also about making intentional decisions during life.

If you have accumulated a large balance of travel rewards, ask yourself:

"Am I saving these for something specific?"

If the answer is no, maybe the best estate plan is turning those points into memories with your family. The trip you take with your children or grandchildren may be worth far more than the points they inherit.

The Bottom Line

Modern estate planning includes assets our grandparents never imagined.

Cryptocurrency.

Online accounts.

Digital photos.

And yes, even your airline miles.

They may not be the largest asset in your estate, but they are part of your financial life. A good estate plan makes sure nothing valuable gets lost simply because nobody knew it existed.