Divorce and Frequent Flyer miles

Divorces have always been nasty, and lawyers have always been creative. But it looks like lawyers are getting even more creative.

    At the annual meeting of the American Academy of Matrimonial Lawyers, Leonard Karp, a matrimonial lawyer from Tucson, Arizona, made a presentation about identifying unusual, overlooked, and exotic assets. Here are some of the items identified by Mr. Karp:


    Frequent flyer miles, credit card reward points, and hotel reward points; security deposits for utilities and telephone; future interests in property (such as remainder interests that can be valued based upon actuarial tables); leased property such as timeshares and vehicles; stock options; early retirement benefits; non-vested deferred compensation plans; unused vacation and sick leave that has been accumulated and is paid at the time of retirement; pending income tax refunds and overpayments of taxes; net operating loss carry-forwards, capital loss carry-forwards, and charitable contribution carry-forwards that can be used in subsequent years; intellectual properties such as trademarks, patents, copyrights, and contracts for royalties; governmental marketable licenses (such as radio licenses, fishing quotas, etc.); “golden parachutes”; dissipated assets; appreciation of separate investment stock accounts by substantial marital efforts; hobby collections (such as Lionel train sets, etc.); future credit against the purchase price of the same product; retirement survivor benefits; sperm and/or unfertilized human eggs; contract rights; country club and other memberships that can be transferred; warranties; licenses and other rights to purchase sporting and entertainment tickets; non-competition agreements; lottery tickets; information databases; goodwill and celebrity goodwill; and reimbursement considerations with regard to pre-marital and post-marital agreements.

(Emphasis mine.)

The writer encourages going after miles and points in a divorce.

    While a few thousand frequent flyer miles may not be worth pursuing, millions of miles and millions of credit card and hotel “usage points” probably are.


    Frequent flyer miles and credit card points should be valued with relative ease because each program tells you exactly what you can expect to receive if you use a specific number of miles or points.

The problem for the divorce lawyer, of course, is that the miles aren’t transferable. The IRS says that they don’t have value. And certainly the airlines are unlikely to be accomodating.

Case closed, right?

Wrong. While a divorce lawyer is unlikely to be successful in actually securing a transfer of miles from one account to another, so miles are probably safe in a divorce, they might well demonstrate that the assets have value. Since they’re non-transferable, a divorce attorney might be able to secure additional other property in lieu of the miles and points.

At the very least it’s one more tool to get nasty in this type of proceeding.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community Milepoint.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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