Rewards from the Grave: Keeping Loyalty Program Benefits in the Family
Estate Planning Developments for Texas Professionals, July 2011
4 Pages Posted: 8 Jul 2011
Date Written: 2011
In today’s highly competitive business environment, there are numerous options for customers to make the most of their travel and spending habits, especially if they are loyal to particular providers. Airlines have created programs in which frequent flyers accumulate, “miles,” or, “points,” they may use towards free or discounted trips. Some credit card companies offer users an opportunity to earn, “cash back,” on their purchases or accumulate, “points,” which the card holder may then use for discounted merchandise, travel, or services. Retail stores often allow shoppers to accumulate benefits including discounts and credit vouchers. Some members of these programs accumulate a staggering amount of points or miles and then die without having, “spent,” them. For example, there are reports that, “members of frequent-flyer programs are holding at least 3.5 trillion in unused miles,.”
What happens to these accumulations of miles and reward points after the member of the program dies? Do they just disappear? Can these benefits be transferred upon death by will or could they pass by intestacy? Are they instead non-probate assets governed by the terms of the contract between the company and the customer? Each program is different and has varying rules, both formal and informal, regarding the transfer of benefits upon the death of the program member.
This article outlines some of the most popular frequent flyer and other loyalty program rules for the transfer of points, rewards, miles, and other benefits. After reviewing the basics for transferring benefits in these programs, the article provides some advice for members and their advisers to use to make sure their accrued points and miles do not disappear after death.
Keywords: estate planning, wills, loyalty programs, frequent flyer
JEL Classification: K11
Suggested Citation: Suggested Citation