What Happens to Airline Miles in Divorce?
- Airline miles are divisible property
- Mile transfer policies of different airlines
- Drafting your settlement agreement
Any asset or debt you and your spouse acquired during your marriage is marital property. As part of a divorce settlement, you must divide this marital property fairly.
But what happens when one or both of you traveled extensively during your marriage, either for business or pleasure, and accumulated an extensive number of airline miles?
Airline miles are divisible property
Airline miles are valuable to travelers and can be redeemed for flights, hotel accommodations, car rentals, and other perks. The miles accumulated by you or your spouse during your marriage are considered divisible marital property, even if they are only in one spouse’s name. Depending on how many miles you’ve earned, they can be important assets to consider in divorce settlement negotiations.
But how do you divide airline miles or determine their value?
Some airlines prohibit the sale or transfer of airline miles. Other airlines allow the transfer of miles at a cost that is often prohibitive. There are other options as well. Airline miles can be redeemed and then divided, or one spouse can offset the value of the other’s share by offering cash or other assets of equal value.
While the actual cash value of airline miles differs depending on the airline, research and analysis aggregator Value Penguin estimates that the average airline mile is worth approximately 1.3 cents.
Does your airline allow you to transfer miles?
Some carriers allow the actual transfer of miles subject to transfer and transaction fees, taxes, and other terms and conditions.
Delta Airlines lets you transfer miles in 1,000-mile allotments with a maximum of 30,000 miles per transaction. Transfers can only be between SkyMiles members. Transfer fees are $0.01 per mile and a $30 transaction fee plus taxes.
American Airlines lets AAdvantage members transfer miles to other member accounts only. Transfer fees are $12.50 per 1,000 miles and a $15 transaction fee plus taxes. Members can transfer or receive a maximum of 200,000 miles in a calendar year.
Southwest Airlines allows the transfer of Rapid Rewards points to other members of the program. Transfers can be done in 500-mile blocks (1,000-mile blocks during promotional periods) with a minimum transfer of 2,000 and a maximum of 60,000 points per transaction. They charge $0.01 per point plus taxes.
JetBlue has a different take on transferring points between accounts. The airline allows family members and friends to pool points and share them at no cost, subject to terms and conditions. Consequently, if both you and your spouse are members of a family pool, both can use your share of the accumulated miles.
Drafting your own property settlement agreement
The less conflict in a divorce, the easier it is to negotiate respectfully and part as friends. If you and your spouse can mutually agree on property division and the other terms of your divorce settlement, it is likely to be less contentious and far more affordable.
At Hello Divorce, we believe there is a better way through divorce than an angry legal battle. A professional divorce mediator or collaborative divorce lawyer can help guide you and your spouse to a mutually agreed-upon divorce settlement that benefits you both. Schedule a free 15-minute call to find out how we can help.
Are you covering everything in your Divorce Agreement?
See what most people include in their Agreements with our free download.
Suggested reading: How to Determine What Is Fair in Your Divorce