Up in the Air: How Are Airline Miles Divided in a Divorce?
Dividing assets during a divorce can be complex, especially when it comes to non-tangible assets like airline miles. In today’s world, frequent flyer miles are often a valuable part of a couple’s shared resources, representing perks, upgrades, and even potential travel opportunities. But how do courts in California handle the division of these virtual assets during a divorce? At Foster Hsu, LLP in San Jose, we help clients navigate the nuances of dividing airline miles, ensuring a fair outcome while preserving as much value as possible.
Are Airline Miles Considered Marital Property?
In California, a community property state, assets acquired during the marriage are typically considered marital property and subject to equal division. However, airline miles present a unique challenge because they are not a traditional financial asset. Their value is often subjective, and the terms and conditions of frequent flyer programs can complicate their division.
In most cases, whether airline miles are classified as marital property depends on how and when they were accrued:
- Earned During the Marriage: Miles accrued through travel during the marriage, paid for with marital funds, or earned through joint credit cards are likely considered marital property.
- Earned Before the Marriage: Miles earned before the marriage may be treated as separate property and excluded from division.
- Gifted or Comped Miles: Miles gifted by an airline or received as a promotional perk may require special consideration, as their value could be disputed.
Challenges of Dividing Airline Miles
Unlike physical assets, airline miles are tied to loyalty programs with strict terms of use. Many programs explicitly prohibit the transfer or sale of miles between accounts, which can complicate their division. Additionally, miles may lose value when converted to other forms or transferred between parties.
Some challenges include:
- Valuation: Assigning a monetary value to airline miles is difficult. Their value depends on how they will be used, the airline’s policies, and even fluctuating redemption rates.
- Program Rules: Some programs allow limited transfers or impose fees for sharing miles, while others strictly forbid transferring miles outside the account holder’s name.
Options for Dividing Airline Miles
Despite these challenges, there are ways to fairly divide frequent flyer miles during a divorce:
- Splitting Miles Equally: If the airline program permits, couples can divide the miles into separate accounts. This may involve fees, which should be factored into the negotiation.
- Assigning Value and Compensating: Instead of physically dividing miles, one spouse can retain all the miles while compensating the other with an equivalent value in cash or other assets.
- Creating a Usage Agreement: In cases where miles cannot be divided, the couple can agree on how the miles will be used, such as sharing flights or allocating specific trips.
Protecting Your Rights
Handling the division of airline miles requires careful negotiation and understanding of loyalty program rules. Our San Jose Divorce Attorneys work with clients to assess the value of frequent flyer miles and develop strategies that minimize loss while ensuring fairness. Whether you’re dealing with miles earned through work travel, joint credit cards, or personal trips, our experienced team is here to guide you.
Contact Foster Hsu, LLP Today
If you’re navigating the complexities of asset division in a divorce, Foster Hsu, LLP in San Jose is here to help. Contact us today for a consultation, and let us assist you in protecting your rights and achieving a fair resolution.
Source:
selfhelp.courts.ca.gov/divorce/property-debts
