Airline miles and rewards points are a frequently overlooked marital asset. Here is how New York law treats them and what you should do to protect your share.
Frequent flyers, savvy credit card users, and hotel loyalty program members can accumulate hundreds of thousands of points and miles during a marriage. A single balance might represent thousands of dollars in free travel, merchandise, or cash back. Yet these assets are routinely overlooked in divorce proceedings — sometimes through ignorance, sometimes through deliberate concealment.
If you or your spouse have accumulated significant rewards points during the marriage, here is what you need to know about how New York courts treat them.
New York follows the rule of equitable distribution, which means that marital property — assets and liabilities accumulated during the marriage — is subject to division in a divorce. The critical question for any asset is whether it was acquired during the marriage and whether it qualifies as marital property.
Rewards points earned during the marriage, using marital income and marital spending, are generally considered marital property in New York. This is true whether the points are held in one spouse's name or the other, and whether the account is a personal card or a business card used for marital expenses.
Points accumulated before the marriage — premarital balances on an account that was opened before the wedding — may be considered separate property, though tracing the premarital portion can be complicated.
The valuation of rewards points is not standardized. Different loyalty programs offer different redemption values, and the value of points varies depending on how they are redeemed. Airlines miles redeemed for first-class international travel can be worth significantly more per point than the same miles redeemed for domestic economy travel or merchandise.
Common approaches to valuing points include:
For most couples, the total value of rewards points is modest relative to other marital assets. But for heavy business travelers or those who have been strategic about rewards accumulation, the balance can be substantial — sometimes representing $10,000 to $50,000 or more in value.
The practical challenge with dividing loyalty points is that most programs do not allow direct transfers between members except in limited circumstances. Airlines, hotels, and credit card programs typically have strict policies governing transfers, and they are under no legal obligation to comply with divorce court orders.
In practice, division of rewards points is usually handled through one of these approaches:
Both spouses agree to redeem the points together — for travel, merchandise, or statement credits — before or during the divorce proceedings, and the value is either shared or offset against other assets.
One spouse retains all the points and the other receives an equivalent value from another asset (cash, personal property, or a credit against another account). This avoids the practical problems with transferring points between programs.
Some programs do allow transfers between spouses or household members. If the program permits it, points can be transferred directly. This should be confirmed with the specific program before relying on it as a solution.
A frequent area of dispute involves points earned through business travel. If one spouse travels extensively for work, the employer's reimbursement policies and the terms of the rewards program determine who "owns" the points as a threshold matter. Points earned on an employer-issued card typically belong to the employer, not the employee. Points earned on a personal card used for reimbursed business expenses are generally treated as marital property if the spending occurred during the marriage.
If you are planning a divorce or believe your marriage may be heading toward one, take the following steps to protect your interests with respect to rewards accounts:
The attorneys at Aiello & DiFalco LLP have helped clients identify and address a wide range of marital assets — including digital assets, business interests, and non-traditional property like rewards programs. If you have questions about what is and is not marital property in your case, we are happy to speak with you.
Attorney Advertising. This article is for general informational purposes only and does not constitute legal advice. No attorney-client relationship is formed by reading this content. Laws and court practices vary and are subject to change. Please consult with a qualified New York family law attorney regarding your specific circumstances.
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