What Happens to Frequent Flyer Miles, Credit Card Rewards, and Hotel Points in a New York Divorce?
Dividing property between spouses during divorce often entails more than simply deciding which party will get the house or how the money from pension plans will be divided. A couple that has been married for some time may have accrued substantial amounts of travel rewards, such as airline miles, hotel loyalty points, and other types of reward programs.
It is important to know how these rewards will be handled during the divorce proceedings, particularly in New York.
Are travel rewards considered marital property?
New York State adopts the principle of equitable distribution, which means that the division of marital property is done “fairly”, but not always equally. All properties gained by one spouse during the marriage become marital property subject to equitable distribution, regardless of whose name is on it.
Thus, frequent-flyer miles, hotel points, and rewards from a credit card can also be subject to equitable distribution. However, this will depend on a few factors, such as the type of reward program and whether the points are redeemable.
Why these assets can be difficult to divide
Unlike money or investments, loyalty rewards can be sold or transferred without restrictions. In many cases, airlines and hotels do not allow point transfers between accounts or charge huge fees. Even credit card points can expire in case of a closed account.
Due to these restrictions, it may be difficult for courts to divide reward balances equally between spouses. As an alternative, spouses usually try to reach a compromise solution concerning their total property division.
For instance, one spouse takes travel rewards, and the other gets a greater portion of some other marital asset.
Determining the value of rewards
Not all points have the same value. Points from airlines, hotels, and credit cards will be valued differently depending on how they are redeemed.
Finding the proper valuation might involve reviewing account statements, past redemptions, or the dollar value of redeemable rewards. However, in most cases, the parties could agree on a value without the need for a valuation.
The important thing is that all of the valuable assets in the marriage are considered.
Full financial disclosure is essential
In a New York divorce proceeding, it is the responsibility of both parties to give a detailed and accurate account of their financial affairs. This includes more than just money. If travel miles have accumulated significantly, they must also be reported among other properties. Not reporting such important property can make the whole process difficult.
It is possible to consult an experienced family lawyer who can help find other hidden properties during the asset distribution process.
Talk to a Rockland County, NY, Divorce Lawyer Today
The Law Office of Robert S. Sunshine represents the interests of those pursuing a divorce in Rockland County. Call our Rockland County family lawyers today to schedule an appointment, and we can begin discussing your next steps right away.
