Beyond the Miles: What Happens to Your Travel Rewards When You Pass Away?

The Travel Hacking Phenomenon

As travel hacking gains popularity, more people are collecting points and miles through credit cards, airline programs, and hotel loyalty programs. The rewards often translate into free flights, hotel stays, or once-in-a-lifetime experiences at little to no cost. Tyler Reedman, an advisor at HFM Investment Advisors, is especially passionate about the subject, having successfully planned a 15-night honeymoon to Greece using points. Tyler highlights the importance of leveraging credit card spending to maximize points accumulation, saying, “It’s about taking the money you’re already spending on credit cards and doing it strategically.”

The benefits of travel hacking can be significant — saving thousands of dollars on travel. However, there’s a catch: you don’t actually own those miles or points. They are simply a perk provided by the companies offering the programs. So what happens to them when you pass away?

A Personal Client Story: Transferring Miles After Death

Catherine Allen-Carlozo, also an advisor at HFM, shares a poignant story about a recent client who passed away. His spouse wanted to transfer his American Airlines Advantage miles to her account, which required a call to American Airlines. Fortunately, the airline allowed the transfer, but there were some strict rules: the surviving spouse needed to have a card with the same bank and be able to provide the deceased’s login credentials. The transfer process could have been more complicated if these conditions weren’t met.

But it’s not always that easy. Some airlines and hotel chains don’t allow for the transfer of points after death. Each program has its own policies, and many of them are not user-friendly. Knowing the rules of each program is crucial when planning how to pass on your miles.

The Wild West of Point Inheritance

The fact that loyalty points and miles are not technically “owned” by the user leads to the tricky issue of inheritance. As Tyler and Catherine discussed, some airlines and loyalty programs are more flexible than others when it comes to transferring points after death. For instance, some programs allow points to be inherited by the next of kin, while others simply expire upon the account holder’s death.

Tyler also pointed out the importance of keeping your login information accessible for your loved ones. “Who knows about your various accounts and how to access them?” he asks. Keeping a list of logins and security questions in a safe, accessible place can make a significant difference when dealing with these unfortunate circumstances. Using a password manager or keeping physical records is a must to ensure that your points don’t go to waste.

Estate Planning: A Key Component

When it comes to estate planning, Tyler emphasizes the importance of specifying what should happen to your points and miles in your will. If you have significant miles, be sure to outline who should inherit them. Should your spouse or a relative be the beneficiary, or should you leave them to someone who will actually use them, like a travel-loving niece or nephew?

Catherine agrees, adding that it’s helpful to document everything related to your rewards points, including where they are stored and how they can be accessed. You can even go as far as to include this information in a “final wishes” book to ensure peace of mind for your family after you’re gone.

The Practical Takeaways

Here are some practical steps to consider when planning for the future:

1. Understand the Policies: Research the rules of the airlines, hotels, and reward programs you use. Each company has different policies on transferring points after death. 
2. Document Your Information: Keep your login credentials and security answers in a secure, accessible place. This could be a password manager or a physical document stored in a safe location. 
3. Include It in Your Estate Planning: Make it clear in your will who should inherit your points and miles. Be specific to avoid ambiguity. 
4. Communicate with Loved Ones: Ensure that your loved ones know about your rewards programs and how to access them if needed. The more they know, the easier it will be for them to benefit from your hard-earned points. 
5. Start Early: As Tyler mentioned, if you’re new to the world of travel hacking, start slow and do your research. Don’t dive in without fully understanding how it works and the responsibilities involved.

Travel hacking is an exciting and rewarding strategy for savvy travelers, but it’s important to plan for the future, especially when it comes to your points and miles. By being proactive in your estate planning and understanding the rules of your reward programs, you can ensure that your hard-earned miles don’t go to waste.

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