Berman & Asbel, LLP

Valuing frequent flyer miles during property division

When a Pennsylvania marriage ends in divorce, a significant portion of that process involves the division of marital property. Property division includes sizable assets such as investment accounts and real property, but can also span lesser matters, such as items of personal property or reward accounts. For couples who travel extensively, frequent flyer points can become an issue of debate within the divorce process.

Travel points may seem insignificant when compared to the value of a house or vehicle, but in some cases these points could total in the hundreds of thousands, making them valuable assets. Points can be redeemed for free travel, as well as other rewards including gift cards or other items of value. Within the divorce process, these points may be considered marital property, and will be negotiated during the property division portion of the proceeding.

The first step in dividing travel points is to assess their value. Some airlines place a dollar value on their points, which can simplify this process. In other cases, the value will have to be agreed upon by the parties before a division can take place. This is an area in which couples should take care not to spend more on negotiating for an asset than that asset is ultimately worth.

When it comes to actually dividing the points, some companies will allow a spouse to transfer half of the points to a new or existing account. Others prohibit such transfers. It is possible to place a cash value on the points and have that amount paid to the other party, or to agree to allow one spouse the right to use the points as they see fit within a certain period of time.

When it comes to this type of property division question, it is important to understand that Pennsylvania couples have flexibility in how they reach an agreement. The ultimate division of assets often includes holdings both large and small, and travel points are an example of relatively minor accounts whose value can add up. The decision on how aggressively to pursue this type of asset is unique to each individual.

Source: Huffington Post, "Divorce Air Wars," Stann Givens, April 27, 2013

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