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Estate Planning For Your Frequent Flier Miles

plneYou’ve crisscrossed the skies on business travel like George Clooney in Up in The Air. Annual family vacations and out-of-town weddings have swelled your balance of unused miles. Or maybe you accrued millions of frequent flier miles buying $1 coins from the U.S. Mint (a strategy that no longer works). Whatever the case, the miles you’ve banked can be redeemed for valuable rewards, so what happens to those miles when you die? The short answer: it depends.

Frequent flier mile programs have varying rules. However, often an airline’s stated policy and actual policy are not consistent. Let’s take a brief look at the (constantly changing) rules for Delta, Southwest, United, and American as of November 2013:

  • Delta: Delta flat out prohibits the transfer of miles on death: The second to last page of Delta’s Skymiles Membership Guide states that miles “are not the property of any member” and absent written authorization by Delta, may not be transferred under any circumstances, including “upon death, or in connection with any domestic relations dispute and/or legal proceeding.”
  • Southwest: Southwest is also inflexible on the matter. The Rapids Rewards terms and conditions state that points “may not be transferred to a Member’s estate, or as part of a settlement.”
  • United: According to a 2012 New York Times article, the program rules used to make specific provision regarding transfer at death. Now there is no mention of death in the Mileage Plus program rules, but instead the more ambiguous statement that mileage cannot be “transferred or assigned except as expressly permitted by United in writing.”
  • American: According to the same New York Times article, American once had a clear policy allowing transfer of miles to a beneficiary at a member’s death. The current AA Advantage terms and conditions leave it up to the discretion of American. The terms state that miles are not transferable upon death, except that American “in its sole discretion, may credit accrued mileage to persons specifically identified in court approved divorce degrees and wills upon receipt of documentation satisfactory to American Airlines and upon payment of any applicable fees.”

So what do you do? Regardless of what an airline’s rules state, you should make a specific provision in your will naming the person(s) who get your frequent flier miles at your death. This can be a blanket statement that includes all other loyalty programs (such as hotel and credit card points). Worst case—the airline strictly adheres to its terms and refuses to honor the bequest. However, for airlines willing to bend the rules for loyal customers, having this specific provision in your will should make it easier to sweet-talk the airline into making an exception.

Further, as a backup to your will, some commentators suggest leaving a list of your frequent flier numbers and passwords for your family. Your family members can then log into the account and use the miles for themselves with the airline none the wiser. One caveat: since many airlines have a booking fee for using miles, using a credit card with a different last name and/or address than the deceased may alert the airline that something is amiss.

The bottom line: having a specific provision in your will for frequent flier miles may be the difference between successfully transferring them to your family and losing your miles for good.