Frequent Flyer Miles and Other Assets in Divorce Attorney Brick and Sea Girt NJ
Did you know that frequent flyer miles are considered an asset to be included in a divorce settlement?
Especially when those miles can be used for family trips or vacations. One spouse typically has a company credit card which he/she uses to purchase tickets and uses for other work-related expenses, entitling him/her to receive benefits in the form of frequent flyer miles. As New Jersey is an equitable distribution state, all assets must be reported, including retirement benefits, artwork, a timeshare location, and others.
What Assets are Included in a Divorce Settlement?
Reaching a divorce settlement agreement is largely about dividing marital assets. You negotiate a division of your jointly-owned real estate, stock portfolios, cash, and even more unusual assets such as expensive collections of art, wine, antique guns, or whatever else you and your husband have come to own together over the years. With all that under discussion, it may seem a bit ridiculous to bring up something that seems as trivial as frequent flyer miles.
Maybe it is difficult to imagine anyone taking a strong stand over air miles, but don’t laugh. Questions like these are very real, and the stakes may be higher than you think. After all, if one or both of you travels often, especially internationally, rewards points can accumulate significantly before you have had time to enjoy the benefits of redeeming them. When you are talking about hundreds of thousands of frequent flyer miles, that can make for some very nice first-class seats!
So, How Exactly do the Air Miles, or other Rewards Points, Get Sorted Out?
The first step is to check the terms and conditions of your various rewards programs. This can be some of the most tedious reading imaginable, but it can give you definitive answers. Some airlines do not allow point sharing between spouses in a divorce. It probably makes more sense to assign a value to those points and negotiate for something of equivalent value in your settlement, instead.
Of course, it is not always straightforward to estimate the monetary value of loyalty program points. Some travel programs provide a cash value equivalent for their points, but many do not. If yours does not, you may have to do a rough conversion of miles or points into trips or other rewards, and then estimate the value of those. For instance, if an airline requires 50,000 bonus miles to be redeemed for a first-class ticket that would cost $1,500, you can reasonably estimate $1,500 as the cash value of the 50,000 miles. However, that value could vary depending on the destination and time of year. As with most things, you’re best served by being proactive. Do some research and come up with a value that is both realistic and defensible
Another strategy, if the company awarding the points will allow it, is simply to have the airline or other reward-granting program divide the points equally into two separate accounts. Keep in mind that if you go this route, there will likely be fees incurred for transferring the points and/or resetting their expiration dates.
It can be difficult to set aside emotions with regard to air miles, as well. People can be very possessive of their travel rewards points, especially since, in many ways air travel is just not as much fun as it used to be, we see the bonus miles as a kind of badge of honor for having endured so much of it. Many people store up the miles for a time when you can use them for a truly pleasurable trip. It’s something to look forward to and having that taken away can leave you feeling cheated.
But remember, when negotiating your divorce settlement, all air miles and other reward points really do come down to money. If you give up the air miles and make a good financial move elsewhere, you’ll likely find you can still take that special trip you’ve been dreaming of and you might just enjoy it even more.
Do you need help with the division of assets in your divorce?
At Peter Bronzino Law Firm, our unique approach to family law centers around creating plans out of problems. We understand just how important fair division of assets is to you and we are prepared to help.
By listening carefully to all of your needs and concerns, and keeping you highly informed and involved throughout the legal process, we believe we can work together to achieve the results you need in your unique legal situation. Contact us by phone at (732) 812-3102.