A beloved but forgotten asset – airline miles

You may want to tell me I am wrong but did you know airline (and hotel) miles are only worth about a penny each?  Yes, really.  Well, think about it. Let’s say it takes 35,000 miles for the average domestic round trip on some airline, right?  What does the average ticket cost?  $350?  So, about a penny a mile. On a rare occasion you can use 35,000 or 45,000 miles for a last minute trip and maybe you get the value of the miles up to two cents a mile. The bottom line is they are not highly valuable in reality.  However, I don’t know about you, but I know for me I cherish them as if they are much more valuable as they are near and dear to my heart!

The thought of dying and losing those miles is simply heartbreaking.  The thought of losing my 84,000 United Airlines Mileage Plus miles or my 50,000 Hilton Honors points is painful.  I worked hard for those miles!  I used my credit card, planned my hotel stays, selected certain airlines… and all to earn miles!  Shoot, my wife wondered why she got flowers for no reason… and I didn’t tell her it was so I could earn some miles!  Ok, ok, I sent them simply to remind her I love her… but I also earned 500 miles in the process!

The fact is that people that collect airline (and hotel) miles can be relatively fanatical about it.  Years ago my Uncle Frank would occasionally fly some unusual flight to earn certain bonuses. That is, he might fly from SFO to Kansas City on a Saturday morning and return that evening… all to earn some mileage bonus.  He would say he was going to Kansas City for a BBQ lunch.  Or he might fly to St. Louis, and on to Chicago, spend one night, and fly back, to earn some multi-leg bonus; with the excuse he was going to catch a Cub’s game as if it made the trip more practical.  At the time, I was a pre-teen, I thought it was silly. As an adult, it makes all the sense in the world to me!

Shoot, I just used a bunch of United Airlines miles to book a room at the Four Seasons for an upcoming trip with my wife. I would not normally spend the money to stay at the Four Seasons but the amount of miles required seemed “cheap” so I went for it.  Plus, I recently used miles to send my wife flowers for Valentines Day. Yes, I earned some miles buying for flowers one time… and now I cashed in miles to send flowers on a separate occasion.  Miles are a new currency… and at times they feel more valuable than the one cent per mile many would value them at.

If you have a living trust you have taken great effort to get all your assets into that trust, right?  However, you can’t do that with miles. Most major programs claim that the miles are not your property and can not be willed at your death.  Some others allow the transfer at death.  I do not know of any that allow you to have your trust “own” your miles nor do I know of a program that allows you to name a death beneficiary of your valuable miles.

The question then becomes, what can you do to plan for the distribution of your miles after death?

First and foremost, like any asset, make sure your executor and trustee know about the rewards programs you have.  If they don’t know about an asset they can’t very well collect it!

Second, maybe you should let them know your passwords and membership numbers?  Maybe there is a way for them to make a transfer on-line? Without the requisite information it would be hard for them to make any transfer.

Third, maybe you should list your mileage and rewards programs in your will?  You could have your attorney specifically include it in your will as follows:

“I give my wedding ring to Bob.  I give my car to Edith.  I give my Marriott Rewards points to my beloved daughter Veronica to use and cherish as I always have….”  

I suggest the above as some programs do want them mentioned specifically in your estate planning documents. My guess is that anybody still reading does not think this is silly because you cherish your miles and points like I do!

In the end, each program is different but I encourage you to spend some time now, before death, so that your loved ones get the benefit of your hard earned miles, nights and points!

P.S. Let me know of any great mileage or points deals you find out about!

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That dirty word… PROBATE!

The word probate conjures up awful images.  Attorneys, accountants, financial advisors, magazines, newspapers, and everybody talks about how awful probate is.  It makes you think of an old Judge, “taxes,” and you have been told it takes YEARS to finish.  None of that is reality.  Probate is not great but… I am here to say there are some cases… [before I say it, I am just saying there are SOME cases...] ok… here it comes… be ready… yes, there are SOME cases where probate makes sense.  Ok, I said it. Now let me say the corollary which is contrary to everything you have ever heard… there are SOME cases where a living trust is NOT beneficial for you.

The probate Court provides some oversight which is just not there with a trust.  This is because trusts are typically not court administered and thus the trustee has much more freedom… to much freedom sometimes!  Having the probate Court involved creates some oversight and rules that are to be followed. Though there are rules with a trust they are often ignored.  It’s hard to avoid the rules with a probate.

Thus, NOT avoiding probate may be good for some people.  Most notably for people who feel there is a strong probability of problems after death.  Kids who will fight, “his kids/her kids” situations, and difficult assets are likely to cause problems.  Why spend the money for a trust?  Just get a will and let the probate Court rules help control the chaos after death! 

When probate is done right, as I do, it’s really a sensible and organized system.  The rules are clearly laid out and, if done by an experience attorney, should take between 7 and 12 months.  Yes, it costs more than a trust, typically, but no cost is to great if it can reduce family fighting!

I am not saying you should not have a written estate plan because you should for sure have that. However, maybe you don’t need a trust!?

Call me to discuss YOUR situation!

-John