What Happens to Your Credit Card Reward Points When You Die?
Before one of my relatives passed away from cancer last year, she mentioned to me a couple of times that she wanted one of her heirs to use the rewards points she had accumulated on her credit card. At the time, I thought it was a kind gesture but didn't want to bother her with trying to transfer them while she was ill. That was probably a mistake, since it's not clear now that we are going to be able to carry out her wishes. As it turns out, redeeming rewards points after someone has died is not always a simple matter.
Here are the three main reasons why reward balances may disappear when you die:
Your points may not really be yours. In July 2011, Professor Gerry W. Beyer, with the Texas Tech University School of Law, and Mikela Bryant, an editor with the Estate Planning and Community Property Law Journal, published Rewards from the Grave: Keeping Loyalty Program Benefits in the Family, the results of their research into policies of the major credit card companies, airlines, and other loyalty reward programs.
They found that in many cases, rewards aren't considered property of the program member, and as a result, may be forfeited when a member dies. Yet, some companies will allow points to be transferred to or used by heirs, though there may be a fee charged for this service. For example, here are the published policies of several of the major airlines:
American Airlines: Neither accrued mileage, nor award tickets, nor upgrades are transferable by the member (i) upon death, (ii) as part of a domestic relations matter, or (iii) otherwise by operation of law. However, American Airlines, in its sole discretion, may credit accrued mileage to persons specifically identified in court approved divorce decrees and wills upon receipt of documentation satisfactory to American Airlines and upon payment of any applicable fees.
United MileagePlus: Accrued mileage and certificates do not constitute property of the member. Neither accrued mileage nor certificates are transferable (i) upon death, (ii) as part of a domestic relations matter, or (iv) otherwise by operation of law.
Southwest Rapid Rewards: Points may not be transferred from one Member's account to another, or to a Member's estate, or as part of a settlement. (Despite this policy, Beyer and Bryant note that Rapid Rewards points earned in the newer version of the mileage program "may be used by anyone after the member's death, whether stated in a will or not" as long as the account is active.)
Delta Skymiles: Upon the death of a Member, the Administrator or Executor of the Member's Estate may designate one or more other Members to receive a transfer of the mileage credit in the deceased Member's account. Only whole number amounts of miles may be transferred. The required form and other instructions for requesting a transfer of mileage under these circumstances is available here.
If they can't be found, they can't be claimed. Beyer and Bryant found in their research that it may be possible to transfer reward balances after someone dies as long as the survivor has the information necessary to log into the account and the transfer. (Some programs consider these transfers after someone has died to be fraudulent, however.) But that means someone needs to know that the person who died had these accounts. And they must know how to access them to initiate a transfer or even to inquire about the company's policy. In our case, my relative happened to mention her miles, but if she had not, I doubt we would have even thought to check into it.
Claiming rewards may not be worth it. Some programs may allow the balance in the deceased person's account to be transferred to an heir but a fee may be charged. For example, despite the terms and conditions above, Beyer and Bryant learned that the United MileagePlus program may allow a transfer of miles to heirs - with proper documentation, of course - for a fee of $75. In that example, if the balance of the account is relatively small, the fee may not be worth it. Or, if the will or estate plan did not specify who gets the rewards and there are multiple beneficiaries, it could be more trouble (or expense) than it's worth to divvy them up.
If you are a reward program junkie and you have worked hard to accumulate a lot of reward points or miles, you may want to investigate your program's policy for distributing any rewards left when you die and plan accordingly. You may have to specifically include them in your will or estate plan, or you may want to make sure your account information is available to the person who will be handling your affairs after you die so they can transfer the points, if that's an option.
The best option, however, is to use them now rather than risk losing them. Many rewards programs are flexible and allow you to redeem rewards for everything from travel benefits (plane tickets or hotel stays, for example), to merchandise, to cash. Unless you are saving for a specific reward, you may want to consider cashing in as you go along rather than letting your balance accumulate.
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