Can You Bequeath Frequent Flier Miles?

You’ve racked up hundreds of thousands of frequent flier miles. They’re worth thousands of dollars, and you’d like to share them with loved ones after you die. Can you? At many airlines, frequent flier miles die when you do, says The Wall Street Journal’s article “A Thorny Inheritance Issue: Frequent-Flier Miles.”

Many airlines simply close the accounts. Others may make an exception, if you plead, but this adds more stress during a time of grief. Like everything associated with airlines, there’s likely to be a fee to transfer miles to an heir’s account, diminishing the value of the miles.

United and American Airlines say their miles are not transferable. Except, if they are. At the airlines’ discretion, they may allow it with proper documentation, like a death certificate, executed will and maybe fees. Spokespeople for both airlines say they have stopped collecting fees in recent years, and United reports that it’s going to update terms and conditions to remove fees, in the case of death.

Others, like Qantas, British Airways, Singapore, and Korean, say that miles die when you do. Southwest gives you 24 months to use miles after the owner dies, assuming you have the right login information. Emirates and All Nippon are among those who require a request to transfer miles, within six months of a death. Some airlines require both a death certificate and a will or a court order showing who was named to inherit the miles.

In 2013, Delta changed its rules to state that miles die with users, unless there is written permission from a Delta officer. That means a vice president and above. Delta doesn’t share the info of what you’d need to have for an exemption. Before the rule changed, Delta’s policy was that miles were owned by the member and could be inherited. However, the language is now far stricter, and the tone is not encouraging. A statement responding to questions, says that Delta encourages customers to reach out and the airline will review them on a case-by-case basis.

For travelers, this is a no-win situation. For one user, who unexpectedly lost her husband, using his miles by accessing his account, got her and her son to a family wedding a year after his death. When a spouse dies, there are many issues and big decisions. That’s the last time anyone should have to be on the phone with an impersonal airline, begging a clerk to transfer miles.

It would be a kindness for airlines to show a human side and allow miles to be transferred with a death certificate. However, at the heart of the issue, is an industry-wide policy that customers don’t own those frequent-flier miles. The airlines do. You’re awarded miles for flying, whether they come from a credit card company or from the airline. The U.S. Supreme Court and lower courts have consistently held that airlines have the right to create the rules and customers must live by them.

Jet Blue and British Airways allow families to “pool” their miles, by linking together accounts of family members and sharing miles or points. However, you must sign up before any of the owners die.

These are Some tips that might help:

  • Put explicit instructions in your will, as to who should inherit your miles. It may help with airline’s “case by case” consideration.
  • Make sure that someone has your account information, passwords and access to the credit card and email that is associated with the account.
  • Don’t pay to transfer miles. If the airline won’t relent, then make sure the fee doesn’t wipe out the value of the miles.
  • If you can sign up for family pooling with an airline, do it.

Reference: The Wall Street Journal (June 19, 2019) “A Thorny Inheritance Issue: Frequent-Flier Miles.”

What Do I Tell My Kids About Their Inheritance?

For some parents, it can be difficult to discuss family wealth with their children. You may worry that when your kid learns they’re going to inherit a chunk of money, they’ll drop out of college and devote all their time to their tan.

Kiplinger’s recent article, “To Prepare Your Heirs for Future Wealth, Don’t Hide the Truth,” says that some parents have lived through many obstacles themselves. Therefore, they may try to find a middle road between keeping their children in the dark and telling them too early and without the proper planning. However, this is missing one critical element, which is the role their children want to play in creating their own futures.

In addition to the finer points of estate planning and tax planning, another crucial part of successfully transferring wealth is honest communication between parents and their children. This can be valuable on many levels, including having heirs see the family vision and bolstering personal relationships between parents and children through trust, honesty and vulnerability.

For example, if the parents had inherited a $25 million estate and their children would be the primary beneficiaries, transparency would be of the utmost importance. That can create some expectations of money to burn for the kids. However, that might not be the case, if the parents worked with an experienced estate planning attorney to lessen estate taxes for a more successful transfer of wealth.

Without having conversations with parents about the family’s wealth and how it will be distributed, the support a child gets now and what she may receive in the future, may be far different than what she originally thought. With this information, the child could make informed decisions about her future education and how she would live.

Heirs can have a wide variety of motivations to understand their family’s wealth and what they stand to inherit. However, most concern planning for their future. As a child matures and begins to assume greater responsibility, parents should identify opportunities to keep them informed and to learn about their children’s aspirations, and what they want to accomplish.

The best way to find out about an heir’s motivation, is simply to talk to them about it.

Reference: Kiplinger (May 22, 2019) “To Prepare Your Heirs for Future Wealth, Don’t Hide the Truth”

Does Estate Planning Include Your Account Passwords?

With most bank customers receiving financial statements electronically instead of on paper, there are some actions you need to take to be sure your accounts are incorporated into your estate planning.

Kiplinger’s recent story, Your Estate Plan Isn’t Complete Without Fixing the Password Problem,” says that having online access to investments is a great convenience for us. We can monitor bank balances, conduct stock trades, transfer funds and many other services that not long ago required the help of another person.

The bad thing about these advancements, is that they can make for a very difficult situation for a surviving spouse or executor attempting to determine where the assets of a deceased person are held.

This was in the news recently, when the founder and CEO of a cryptocurrency exchange died unexpectedly. Gerry Cotten didn’t share the password to the exchange’s cold storage locker—leaving $190 million in cryptocurrency belonging to his clients totally inaccessible. Investors may never see their funds again.

You can see how important it is to provide a way for someone to access your data, if you become incapacitated or die.

The easiest, but least secure answer is to just give your passwords to a trusted family member. They’ll need passwords to access your accounts. They’ll also need a password to access your email, where electronic financial statements are sent. Another simple option is to write down and place all passwords in a safe deposit box.

Your executor or guardian/attorney-in-fact through a power of attorney (in the case of incapacitation) can access the box and your passwords to access your computer, email and financial platforms.

This is a bit safer than simply writing down and providing passwords to a trusted friend or spouse. However, it requires diligence to keep the password list updated.

Finally, the most secure way to safely and securely store passwords is with a digital wallet. A digital wallet keeps track of all your passwords across all your devices and does so in an encrypted file in the cloud.

There’s only one obstacle for an executor or surviving spouse to overcome—the password for your digital wallet.

Wanna know how to protect your possessions and pass them down to your heirs? Click here.

Reference: Kiplinger (April 19, 2019) “Your Estate Plan Isn’t Complete Without Fixing the Password Problem”