What Happens to My Airline Miles and Credit Card Points When I Die?

For many airline miles and credit card points play a significant role in their financial and travel planning, offering a way to make life and experiences more affordable and accessible. Sign up bonuses, shopping deals, and upgrades  – oh my! But the question remains: What happens to my airline miles and credit care points when I die?

Of course, the answer is not straightforward and varies by program. However, understanding the general practices and preparing accordingly can ensure your hard-earned points and miles don’t simply vanish.

Airline Miles

The policies regarding the transfer of airline miles after death are airline-specific. Some airlines allow the transfer of miles to a beneficiary’s account upon the account holder’s death, while others may not. For instance, some airlines may require a copy of the death certificate and possibly a small fee to transfer miles to an heir’s account.

Credit Card Points

Credit card points are slightly more complicated due to their diverse redemption options. The terms of transferring points after death depend on the credit card issuer’s policies and the underlying rewards program. Some issuers may allow points to be transferred to another account, while others might liquidate the points into the estate.

Navigating Policies: What You Need to Know

  1. Read the Fine Print: The first step is to understand the terms and conditions of your airline and credit card reward programs. Look for sections that discuss the transferability of points and miles upon the account holder’s death.
  2. Airline and Credit Card Policies Vary: Policies can range from allowing the transfer of points and miles to heirs, to outright forfeiture upon death. Knowing each program’s rules can help you plan accordingly.

Preparing for the Inevitable: Tips to Manage Your Digital Assets

1. Maintain an Updated Record

Keep a detailed record of your memberships, including account numbers, login information, and the current balance of points and miles. This record should be stored securely but made accessible to your executor or a trusted family member.

2. Include Digital Assets in Your Estate Planning

When crafting your estate plan, don’t overlook your digital assets, including airline miles and credit card points. Consult with an estate planning attorney to understand how you can incorporate these assets into your will or trust. While the direct transfer might not always be supported, having a plan increases the chances of your heirs benefiting from them.

3. Designate a Beneficiary (When Possible)

Some programs allow you to designate a beneficiary or add a trusted individual as an authorized user. This designation can sometimes facilitate the transfer of points or miles after death, making the process smoother for your loved ones.

4. Understand the Tax Implications

While airline miles and credit card points are not considered taxable income by the IRS, the implications of transferring large amounts of points or their conversion into monetary value for an estate can be complex. It’s wise to consult with a tax advisor to understand any potential tax implications for your estate or heirs.

5. Consider Using Points and Miles

If you have a significant balance of points or miles, consider using them for family trips, upgrades, or other benefits while you are alive. This proactive approach not only ensures you enjoy the fruits of your labor but also simplifies the process for your heirs.

6. Communicate with Your Heirs

Discuss your wishes regarding your airline miles and credit card points with your heirs. Clear communication can prevent confusion and ensure that your assets are handled according to your preferences.

7. Check for Transfer Fees

Some programs may allow the transfer of points or miles after death but could impose a fee. Include instructions in your estate plan regarding the payment of these fees, ensuring a seamless transfer to your beneficiaries.

8. Regularly Review and Update Your Plan

As airlines and credit card issuers frequently update their terms, it’s crucial to review your estate plan and asset records periodically. This ensures that your plan remains aligned with current policies and your intentions.

While the topic of what happens to your airline miles and credit card points after death may seem minor in the grand scheme of estate planning, these assets can represent significant value. Taking steps now to understand the policies of your reward programs and incorporating these assets into your estate planning can make a meaningful difference for your heirs. By following the tips outlined above, you can ensure that your points and miles provide value to your loved ones, even in your absence.

Remember, estate planning is not just about assets and liabilities; it’s about ensuring that your legacy and wishes are honored. Including your digital assets in this plan is a testament to your thorough and considerate approach to estate planning.

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