Via Jerry, the July issue of Estate Planning Developments for Texas Professionals (exciting reading!) has a piece on transferring frequent flyer miles at death.
It’s a nice companion to the classic April 2004 Inside Flyer article that explains in broad terms how programs treat miles in death, that piece is especially useful for understanding the extent to which miles are an asset of the estate vs. forfeited when the member is no longer alive to use them (and covers the similar case of divorce).
The newer article provides updated details on a series of programs, domestic and international and even proprietary credit card programs, outlining ability to transfer at death, cost to do so, and procedure.
If you’re planning your estate and are a significant accumulator of miles and points, this is useful reading. Although, legalities aside, it’s often simplest to just make a list of your account numbers and passwords and have your spouse book awards out of your account. Some programs require that folks besides the accountholder that are eligible for award tickets be designated in advance, that can often be done online or at least can be done in writing. British Airways, for instance, says they’ll only speak directly to the member — so the spouse (assuming not same-sex) may need to have someone call for them acting as though they were the member, or better yet fill out the forms in advance to designate your spouse to speak to the program on your behalf and then it’ll be far less sketchy.
Bottom-line is it’s often easiest to just use the miles in an account rather than transfer miles at death, but many programs do permit such transfers and miles are sometimes treated as de facto assets when it comes to transferring the fruits of loyalty from one member to another when they pass away, even when at other times the programs maintain that the miles are not assets of the member to be transferred at will and the IRS generally doesn’t view miles earned from personal travel or personal credit card spend to be income for taxation purposes. It’s a fine line to walk, but many programs find a way to thread the needle to offer some modicum of compassion and the possibility of future travel.