How to Pass Your Airline Points Down to Your Heirs
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From GDP growth to industry productivity to labor supply, tap into local economic data at empoweringamericancities.com. Fifth Third Bank National Association member FDIC. Here's your money briefing for Monday, June 9th. I'm Julia Carpenter for The Wall Street Journal. More than 2% of Americans 55 and older have racked up more than 500,000 reward points or miles after years of travel.

according to a survey by rewards travel search platform Point.me. That's a stockpile worth thousands of dollars. But most of the time, those rewards simply vanish when the account holder dies. What do we do with all these miles? Because you feel like it's something you're owed and you don't want it to go to waste. And so you have to be...

strategic about it to make sure that they're not disappearing when you leave the mortal coil, as it were. We'll talk with WSJ reporter Jacob Passy about the creative and complicated ways in which account holders protect their points for the next generation. That's after the break.

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It's how our people make the difference every day. KPMG, make the difference. Learn more at www.kpmg.us slash insights. Over a lifetime of summer vacations, business trips, and holiday travel, many Americans are sitting on a fortune. A fortune in airline and mileage points.

But after you're gone, some airlines will charge you a hefty fee to bequeath the rewards to someone else. And most of the time, the companies just take it all back. Wall Street Journal reporter Jacob Passy joins me to talk more. Jacob, these rewards programs have changed so much just over the last decade. And now your reporting shows us that people are asking how they can share their rewards even after they're gone.

What are some of the common questions these account holders have about that? One of the common questions is, what do I do with all these points and miles? A lot of people nowadays have credit cards tied to different travel programs, airline-branded credit cards, or Chase Sapphire's general credit cards. And those can

can rack up a lot of points for you if you put your spending on them, and then people don't touch them nearly enough. And so they, in a retirement, are planning on using all those miles, and oftentimes they have more than they need, or life gets in the way and they're not able to travel as much as they thought they were going to and suddenly are sitting on

these rewards that could be put to good use, but are just sitting there. I'm so curious about how the companies are thinking of these. Because even though we've, quote unquote, earned these miles, we don't own them. Or at least in the eyes of the airline, we don't owe them. Correct. Airlines view these as a perk. It's a point or a mile doesn't

have an explicit value. It's whatever value the airline assigns to it, and that changes. So airlines have really moved away from sort of set structures of how much points or miles get you. Now it's all based on dynamic pricing, so there's no rewards charts like there used to be decades ago. And

As that's happened, they continue to emphasize that, yes, you've earned it in a sense, but it doesn't have an inherent cash value anymore.

And that makes all this really tricky. So when it comes to what you do with these points or miles later in life or when you pass away, it's really up to the airline's discretion. And in your story, which we're linking in our show notes, you write that there are a couple easy, low-lift ways to pass these miles and points on to a family member. Walk us through some of those options. Sure.

So there are a few airlines that allow you to pool points or miles. United is one, JetBlue is another. Usually it's just with family, but sometimes they allow it to be with non-relatives as well. So basically, you know, a group of people can link up their accounts in a pool and

deposit however many miles they want to into that pool and then everyone can access it. If you do that with someone and they pass away, their miles stay in that pool. There is a caveat where if the person who is the one who started the pool dies, then the pool is disbanded. So with everything, there are caveats with all of this, but that is an easy way. It is free to do. It's pretty straightforward. And then you don't have to deal with going through

documentation and the paperwork necessary to pass along points or miles in an inheritance, essentially. You can also put them to use in other ways. You can donate them. Most airlines have portals connected to their frequent flyer programs where you can

donate miles to different charitable causes. And then those charities will use them either to book flights or will convert them into cash. And that doesn't cost anything. So, you know, that's another way you can put them to use if you don't want to use them yourself.

You can also just book travel for people. So let's say you've got grandkids and you want to pay for them to fly to Disney World or what have you. You can do that. You can use your miles to pay for their flight. I want to mention another one that almost sounds silly in how simple it is. But when you mentioned in your story, I thought, oh my gosh, yeah, why don't I do that? Just sharing your account login with someone.

Yeah, this was one piece of advice that I got from a few people was if you give your loved ones access to your accounts, they can continue to use the points and miles so long as they're still active. Keep in mind that

With some airlines, your miles do expire after a certain period of time. So they're not good forever necessarily. That's not the case with all airlines, but it is with some. I will say that on paper, technically, you probably should notify the airline that the person passed away. This is...

exploiting a loophole as it were, but it helps you avoid losing access to those miles. And it's something you should also just do in general, like when you're coming up with your estate planning and other documents, just like you would share logins for bank accounts and things like that, include logins for loyalty programs in the mix. As you mentioned before, a lot of people

access travel rewards through their credit cards, through credit card rewards programs. But the rules are a little different there. Yeah. So when it comes to a credit card like a Chase Sapphire or Amex Platinum, where you're not earning specific miles for a specific airline program, but just like general Chase rewards or Amex rewards, what have you.

Those points, rather than going away when a person passes away and their account is closed, instead are used as a statement credit. So when you notify the bank or credit card issuer that the person who had the account has died, any debt that they still owed on that card will be paid off using those points.

Jacob, you spoke to so many different people for this story, financial professionals, loyalty program veeps. Are airlines wanting to make a program so that you can do this? Could we see that in the future or no? Something we're increasingly seeing as these frequent flyer programs have matured is people would just stop.

huge balances of points and miles. Baby boomers are kind of the first generation that has really lived their full adult lives pretty much in an era of frequent flyer programs. And as a result, as baby boomers are entering retirement, we've seen them enter retirement with huge balances of rewards.

I've written so much about the prospect of the great wealth transfer and so many other reporter colleagues have too. And it's so interesting to think about miles and loyalty programs being part of that. And it's overlooked. I spoke with one person. He's managing the

financial affairs for a friend of his, and discovered that she had over 700,000 miles with United just from traveling and spending on credit cards over the years. And now she's in assisted living and can't use them. And so they're like left wondering, what do we do with all these miles? Because you feel like it's something you're owed and you don't want it to go to waste. And so you have to be strategic about it.

to make sure that they're not disappearing when you leave the mortal coil, as it were. 700,000 miles, that's probably, what, two trips to Fiji? Right, right. A lot of people also save up miles with the goal of that dream bucket list vacation. And in reality...

A lot of us don't get to go on those. It's sad to say, but life gets in the way. People get sick. You get injured. Work gets in the way. Those dream vacations that a lot of people stockpile these points for don't always happen. And if they don't happen, what happens to those points? And so it's important to be strategic and include that in your planning of your overall finances when you're thinking about retirement and your estate. So your grandkids could go to Fiji. Exactly. Yes.

That's WSJ reporter Jacob Passy. And that's it for your Money Briefing. We'll be back tomorrow with WSJ contributor Joanne S. Lublin to discuss five financial mistakes people make in divorce. This episode was produced by Ariana Asparu with supervising producer Melanie Roy. I'm Julia Carpenter for The Wall Street Journal. Thanks for listening. ♪

Thank you.

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