Some cardholders accumulate a staggering amount of points or airline miles and then die without having “spent” them. There are reports that members of frequent-flyer programs are holding at least 3.5 trillion in unused miles. Gerry Beyer, Texas Tech University School of Law, reveals insights from the new report, “Rewards from the Grave,” which he co-authored with Mikela Bryant of the “Estate Planning and Community Property Law Journal.”
PYMNTS.com: Tell us a little bit about why you felt it was important to explore this topic?
GERRY BEYER: The majority of airlines and large retail businesses promote loyalty by providing their customers an opportunity to accumulate rewards or points. Unfortunately, most of these rewards recipients do not consider what happens to their rewards when they’re no longer alive to use them.
PYMNTS.com: What popular frequent flyer and other loyalty programs in particular did you examine in the report, and what were their respective rules?
BEYER:
American Airlines AAdvantage Program
Upon death, a participating AAdvantage member may be allowed to transfer his or her accumulated mileage credit to persons named specifically in a court-approved will or estate plan. American Airlines reserves sole discretion for allowing such a transfer to occur.
United Airways Mileage Plus Program
United Airlines’ Mileage Plus Program, by specific language in the program’s terms and conditions, seems to prohibit any type of transfer of accumulated mileage. However, Airwatchdog.com reports that a deceased member’s miles may be transferred to a named beneficiary for a $75.00 fee if the executor of the estate contacts UA’s customer service and requests a form for the transfer. You will also need a death certificate and proof of the identity of the intended beneficiary.
Continental OnePass
Upon death, a OnePass member’s “accumulated mileage and points may be transferred to the surviving spouse or a beneficiary named in a will.”
Southwest Airlines Rapid Rewards
No type of mileage transfer is allowed. However, accumulated miles can be used so long as the member account is active—regardless of whether the member is actually alive.
Air France Flying Blue
Membership is canceled “upon receipt of the member’s death certificate” and accumulated miles may not be transferred from the deceased’s account.
Air New Zealand Airpoints
Membership is terminated upon death. Accumulated points and miles may be transferred if the intended beneficiary is also a member of the Airpoints program and depends on the types of points or miles being transferred and country the member is registered in.|
Asia Miles
Miles may be transferred “through a will or other testamentary document as long as the transfer complies with living transfer requirements.”
Capital One Venture Card
The specific terms of the card governs whether or not unredeemed rewards points or miles may be transferred.
Wells Fargo Business Check Card Rewards Program
The current points balance of the account may be transferred to a new checking account if that account replaces he old account. Rewards points that have not been redeemed are lost if an account is closed or canceled and a new account does not replace the old one.
Best Buy Reward Zone
Points may not be transferred; however, points unredeemed at the time of the member’s death may be redeemed by anyone with access to the member’s online login information.
Amtrak Guest Rewards
Points may not be transferred to another person as the result of a member’s death or divorce. Transfers can only occur from one living member to another living member for a fee of $0.01 per point in 1,000 point increments.
PYMNTS.com: What were some of the key findings? Any big surprises?
BEYER: The most surprising trend I noticed was that, despite not advertising what happens upon death, most of the major airlines have programs in place to deal with these kinds of transfers—you just have to know what to ask and whom to ask.
PYMNTS.com: What are the incentives for loyalty programs to allow transfer of accrued points and miles after death? On the flip side, are there any significant downsides?
BEYER: The biggest incentive is continued customer loyalty. By allowing these types of transfers, companies would either (1) gain new customers to make up for those they have lost or (2) cement customer loyalty to their programs by showing customers just how much they care about their continued business. The biggest downside is that companies offering loyalty program benefits would need actually to deliver more of those benefits as the right to those benefits would no longer be lost upon a person’s death.
PYMNTS.com: What advice would you offer cardmembers to ensure their accrued points and miles do not disappear after death?
BEYER:
Obtain Information About Benefits Programs
Preparing for the transfer of loyalty benefits hinges on the person’s specific circumstances and the program involved. The following need to be determined:
1. To what loyalty programs does the person belong?
2. Does the person have (or is likely to have) a sufficient accumulation of benefits to merit planning?
3. What is each program’s formal policy for the transfer of benefits when a member dies?
4. Does the program have an informal method for the transfer of benefits upon a member’s death?
5. Does the program have a policy for the transfer or gifting of miles or points during a member’s life which may be a better option than delaying a possible transfer until the person’s death?
6. Is the intended beneficiary a current member of the same program as the person?
Drafting and Preparing the Transfer
The rules of the loyalty program to which the person belongs plays the key role in determining whether the accrued points may be transferred. Many customer loyalty programs do not allow transfer of accrued points upon death, but as long as the beneficiary knows the online login information of the member, it may be possible for the remaining benefits may be transferred or redeemed. However, some loyalty programs may view this redemption method as fraudulent or require that certain paperwork be filed before authorizing the redemption of remaining benefits. If the program allows anyone with access to the deceased member’s online account to redeem unused points, it is important that the intended recipient have all the information needed to make the transfer, such as the account number, user name and password.
Not all is lost simply because a program’s terms and conditions state on paper or online that benefits may not be transferred by will or other estate planning technique. For example, some frequent flier programs, even ones stating that miles are nontransferable, may have informal policies which allow the transfer of miles after a program member’s death. Contacting the program’s customer service department is the best way to determine what steps to take to make sure accrued miles stay in the family. It may be advisable for this step to be taken before the person dies so that all necessary information and forms are available to complete the transfer after death.
It is also important to know whether the program allows accrued miles or points to be transferred, shared, or gifted at any time during active membership. Program rules usually cover various methods a member may use to share or gift rewards to other members, or in some cases, to buy rewards for non-members. These provisions offer the estate planning attorney methods of transferring unused rewards if the person is willing to part with the benefits during life.
Monitor Loyalty Program Rules
Loyalty program rules often change. Thus, a dispositive plan, be it inter vivos or testamentary, may not work as intended. Accordingly, a regular review of loyalty program rules is necessary to make certain the person’s intent will be effectuated. The costs of conducting such a review must be balanced against the value of the benefits so that the expense of planning does not exceed the value of the benefits.
Professor Gerry W. Beyer received his J.D., summa cum laude, from the Ohio State University and his LL.M. and J.S.D. degrees from the University of Illinois. Both his master’s thesis and doctoral dissertation topics involved estate planning issues. Professor Beyer joined the faculty of the Texas Tech University School of Law in June 2005 as the Governor Preston E. Smith Regents Professor of Law. Previously, Prof. Beyer taught at the St. Mary’s University School of Law and has served as a visiting professor at several other law schools including Boston College, Southern Methodist University, the University of New Mexico, Santa Clara University, and La Trobe University (Australia). A member of the Order of the Coif and the recipient of dozens of outstanding and distinguished faculty awards, Professor Beyer specializes in estate planning and teaches courses such as Wills and Estates, Trusts, and Estate Planning.
Prof. Beyer is the editor of the most popular estate planning blawg in the nation and is a frequent contributor to both scholarly and practice-orientated publications. He has authored and co-authored numerous books and articles focusing on various aspects of estate planning, including a two volume treatise on Texas wills law, an estate planning casebook, and the Wills, Trusts, and Estates volume of the Examples & Explanations series. In 1993, he received the Probate & Property Excellence in Writing Award for Best Cutting Edge Article for Probate and Trust as well as the 2001 Probate & Property Excellence in Writing Award for Best Overall Article in Probate and Trust. He has been the Keeping Current Probate editor for Probate & Property magazine since 1992. Professor Beyer is an Academic Fellow of the American College of Trust and Estate Counsel and maintains membership in the American Law Institute, the American Bar Foundation, the Texas Bar Foundation, and the College of the State Bar of Texas.
Mikela Bryant is a third year law student at the Texas Tech University School of Law who serves as Events Committee Chair and Comment Editor for the Estate Planning and Community Property Law Journal. She is also participates in the Civil Practice Clinic and is a Research Assistant to Professor Gerry W. Beyer. After graduating, she hopes to become a Criminal District Attorney, but would like any opportunity to use her law degree to make a difference in someone’s life.
Mikela graduated with a Bachelor of Arts in History from Angelo State University where she was an avid participant in intramural sports and a volunteer at the San Angelo YMCA.
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