Rewards Points can be Marital Property... Who Knew?

 Posted on January 19, 2014 in Divorce

With a few exceptions, all assets acquired during an Illinois marriage are considered marital property.  Most people may be aware that marital property can include significant assets such as a home pension plans, stocks and bonds. However, many people may not be aware that rewards points like frequent flyer miles, hotel points, and other similar points earned during the marriage may also be considered marital assets.  If the rewards points, or a portion of the points, were earned before the marriage, then the points are considered non-marital assets and are not subject to be divided upon divorce.

 Division of Rewards Points by the Divorcing Parties One way for the divorcing parties to divide the reward points would be to contact the airline, credit card company, or hotel and have them divide the points into two separate accounts.  This way, each spouse can take their separate account and use its reward points independent of the other spouse.  If the assets are frequent flyer miles, any transfer fees that an airline might charge should be considered in any divorce settlement agreement. Other issues that should be considered include some rewards programs’ prohibition on the transfer of points, even if the transfer is stated in a divorce decree; the potential expiration of reward points; and any possible fees associated with renewing the points. If the rewards program prohibits division of the points, then one spouse could agree to maintain the points and distribute half of the points to the other spouse upon request.  For example, after the divorce, the spouse who possesses the points would be responsible for booking a flight or hotel room for the ex-spouse.  The divorcing parties could also agree to reserve the rewards points for children or other family members to use.  Division of Rewards Points by the Court If you and your ex-spouse cannot decide on how to divide your property upon divorce, the court will determine what marital property is and how much that property is worth. If an airline, credit card company, or hotel places an actual cash value on the points, then the court’s calculation is straightforward.  Conversely, if rewards program does not assign an actual cash value to the points, it can be difficult for the court to compute a value for frequent flyer miles, hotel points, or other rewards points for the division of marital property. Reward points can vary in value depending on which flight or hotel property you wish to use, and what time of year or day you wish to use the points. Additionally, airlines, credit card companies, and hotels may be unclear regarding the actual value of the points, which can make it difficult for a court to award cash, or a spouse to offer cash to buy out the other’s spouse’s interest in the reward points.  Assistance with a Claim for Division of Marital Property It is not always easy to decide how to fairly divide reward points and other assets and debts of divorcing parties.  If you believe your spouse might have rewards points that could be marital assets, Goostree Law Group, P.C., can help you decide your best settlement options to divide the reward points and other assets equitably.  Contact our experienced Kane County family law attorneys today to see how we can help.