Many people have credit card reward points. You might also have miles for flying on planes. When a husband and wife decide to get a divorce, they have to split everything they own. These points and miles are things you own together, so they must be split too. It is important to know how to do this in a fair way so no one feels left out. This guide will help you understand how to handle these rewards.
Why Do Points and Miles Matter in a Divorce?
Value of Rewards: Many people do not think about their reward points as money. But these points can be worth a lot. They can be used for free flights, hotel stays, or even cash back. If you have a lot of points, they could be worth thousands of dollars. Not splitting them would be like not splitting money in a bank account. Our guide on what happens to bank accounts during divorce can show you how money is handled.
Fairness in Splitting: A divorce means you are separating your lives and your things. To be fair, everything of value that you got while married should be shared. This includes points and miles. Forgetting to include them in your divorce papers can cause big problems later. It is best to talk about them from the start with help from good family law attorneys in Michigan to make sure the split is right.
Things to Remember About Points:
Points are Property: The court sees reward points just like any other thing you own, like a car or a chair.
Check Your Totals: You should find out exactly how many points and miles you both have.
They Add Up: Even small amounts of points on different cards can add up to a lot of value.
Places Where Points Come From:
Credit Cards: Points you get from buying things with a credit card.
Airlines: Miles you get for flying with a certain airline.
Hotels: Points you get for staying at certain hotels.
Real-Life Story: A couple named Tom and Jane were getting a divorce. Tom traveled a lot for his job and had a million flyer miles. Jane stayed home and used a credit card for all the family shopping, getting many reward points. At first, they did not think to split them, but their lawyer told them the miles and points were worth over ten thousand dollars.
How Do You Find Out the Value of Your Points?
Checking the Point Value: The first step is to learn what your points are worth. Each rewards program is different. Sometimes, one point is worth one cent. Other times, the value can change depending on how you use the points. You can often find this information on the reward program’s website. Look for a “redeem rewards” page to see what you can get for your points.
Making a List: You should make a full list of all the reward accounts you and your spouse have. Write down the name of the program, the account number, and how many points are in each one. This list will help you see the big picture. It will also make it easier to talk about how to split them. You can learn more by watching this video about how to divide rewards points and miles.
Ways to Find Point Value:
Program Website: Go to the airline or credit card website to see their points calculator.
Travel Portals: Using points for travel often gives you the best value, so check flight prices in points.
Cash Back Option: See if you can trade your points for cash to find a simple dollar value.
Information to Collect:
Account Statements: Look at your monthly statements to see point totals.
Online Logins: Log in to each rewards account online to get the most current number.
Call Customer Service: If you cannot find the information online, call the company and ask.
Real-Life Story: Maria and Sam had five different credit cards, all with reward points. Maria sat down and logged into each account online. She made a chart that showed Sam they had over 500,000 points in total, which could be used for a big family trip or turned into $5,000 cash.
Are All Points Shared in a Divorce?
Points From Before Marriage: Sometimes, one person might have had a lot of points before the wedding. In general, things you owned before you got married can sometimes stay yours. If you can show that you earned a large number of points before the marriage, you might be able to keep them. You would need to have good records, like old statements, to prove this.
Points From After You Separate: Points that you earn after you have officially separated are usually yours to keep. The key is to know the date you separated. Any points earned after that day would not be part of the things you share. This is similar to how joint accounts work when you are not married; what you earn on your own is yours.
When Points are Yours:
Earned Before Marriage: Points you had when you were single are often not shared.
Received as a Gift: If a family member gifted you points, they might be just for you.
Earned After Separation: Points you make after you split up are usually not shared property.
When Points are Shared:
Earned During Marriage: Most points earned from the wedding day to the separation day are shared.
From a Joint Card: Points earned on a credit card that is in both of your names are shared.
Used for Family Things: If points were used for family trips, they are seen as a shared item.
Real-Life Story: Ben had a credit card for ten years before he married Lisa. He had 100,000 points saved up. During their five-year marriage, they earned another 200,000 points on that same card. When they divorced, their lawyer helped them agree that Ben would keep the first 100,000 points, and they would split the 200,000 points they earned together.
What Are the Main Ways to Split Points?
Buying Out the Other Person: The most common way to split points is for one person to keep them and pay the other person for their half. This is called a buyout. First, you agree on how much the points are worth in cash. Then, one person gives the other half of that amount. This is a clean and simple way to handle it.
Using Points for a Shared Goal: Another great way to use the points is to agree on a future use that helps both people. For example, if you have children, you can decide to use flyer miles for the kids to fly between your two homes. Or you could save hotel points for trips related to the kids. This way, the points are used for a good reason that you both agree on.
Popular Ways to Split Rewards:
Cash Buyout: One person pays the other for their share of the points.
Trade for Something Else: You could trade your share of points for another item of equal value.
Use for Kids’ Travel: Agree to save the points to pay for children’s travel needs.
Less Common Ways to Split:
Transferring Points: Some programs let you move points to another person, but there can be fees.
Booking for the Other: The person with the points can book a flight or hotel for the other person.
Splitting the Account: This is very rare, as most companies do not allow two people to split one account.
Real-Life Story: When Anna and Mark got divorced, they had a lot of hotel points. They decided that instead of trying to find a cash value, they would save them. They wrote in their divorce papers that the points would be used for hotels when they traveled to see their kids’ sports games in other towns.
Can a Judge Decide How to Split the Points?
When You Cannot Agree: If you and your spouse cannot agree on how to split the points, a judge will have to decide for you. You will both have to show the judge how many points there are and what they are worth. The judge will listen to both sides and make a choice that they think is fair. Going to a judge can take more time and money, so it is best to try to agree on your own if you can.
What a Judge Considers: A judge will look at the points like any other property. They will want to know when the points were earned and what they were used for. The judge’s goal is to split all your shared things in a way that is fair to both people. A good Michigan divorce attorney can help explain what a judge is likely to do in your state.
What to Show a Judge:
A Full List of Points: Give the judge a clear list of all reward accounts and their totals.
Proof of Value: Show papers or website printouts of what the points are worth.
Your Idea for Splitting: Explain to the judge how you think the points should be split and why.
What a Judge Can Order:
Order a Buyout: The judge can tell one person to pay the other for their half of the points.
Order Points to Be Used: A judge might order the points to be used for a certain thing, like for the children.
Order a Transfer: If the program allows it, a judge could order points to be moved to the other person.
Real-Life Story: David and Karen could not agree on anything, including their airline miles. They went to court, and the judge looked at their situation. The judge ordered David to use half of the miles to book a flight for Karen to visit her family, which he thought was a fair solution.
What About Points from a Work Credit Card?
Points from a Job: Sometimes, a person travels for work and uses a company credit card. The points earned on that card can be a gray area. If the company lets the person keep the points for their own use, then those points could be seen as part of the shared property. It depends on the rules of the company and how the points were used.
Keeping Work and Home Separate: If the points were earned for work but were used for family trips, they are almost always seen as a shared item. For example, if you used work flyer miles to take your family on a trip, those miles benefited the family. This makes them part of the things you must split. It is important to be honest about all points, even those from a job.
Questions to Ask About Work Points:
Who Owns the Account?: Does the company own the rewards account or does the person?
What is the Company Rule?: Ask the job what their rule is about keeping points from work travel.
How Were They Used?: Were the points ever used for family things instead of work things?
When Work Points Might Be Shared:
Company Allows Personal Use: If the job says you can keep the points for yourself, they are like extra pay.
Used for Family Trips: Using work points for a family trip makes them a shared benefit.
Mixed With Personal Points: If you move work points into a personal account, they become shared.
Real-Life Story: Sarah was a consultant who flew every week for her job. She had millions of flyer miles in her name. Even though they were from work trips, her company let her use them however she wanted. Because she used them for family trips, she and her husband had to include them in their divorce talks.
Why Must Points Be in the Final Divorce Papers?
Making it Official: Any agreement you make about your points and miles must be written down in your final divorce papers. This is the legal document that ends your marriage. If your agreement is not in this paper, it is not official. A spoken promise to split points later is not enough and can be easily broken.
Avoiding Future Fights: If you leave the points out of the final papers, you will likely fight about them later. One person might use all the points without telling the other. Or you might not be able to agree on how to use them. Putting the plan in writing makes it clear. It protects both of you and makes sure the agreement is followed.
What to Put in the Papers:
List All Accounts: Write down each rewards program and the account number.
State the Split: Clearly say who gets what, whether it is a buyout or a plan for use.
Include Deadlines: If one person has to pay the other, include a date for when it must be paid.
Why a Written Plan is Key:
It is a Rule: The court can make you follow what is written in the final papers.
No Confusion: A written plan stops arguments about what you agreed to.
Final and Done: Once it is in the papers, the decision is made and you can move on.
Real-Life Story: When Tim and Gina got divorced, they talked about their credit card points but forgot to tell their lawyers to put it in the papers. A year later, Tim used all the points on a trip for himself. Gina was upset, but because it was not in the divorce papers, there was nothing she could do about it.
Who Can Help You With Dividing Points?
A Good Lawyer’s Role: Splitting points can be tricky. A good divorce lawyer knows how to handle these kinds of details. They can help you figure out the value of your points and give you ideas on how to split them fairly. A lawyer will also make sure the final agreement is written correctly in your divorce papers so there are no problems later.
Working Together: The best result comes when you and your spouse can work together. Try to have an open talk about the points. If you can agree on a plan, you will save time, money, and stress. A lawyer can help guide your conversation and make sure you are both being treated fairly. They are there to help you reach a good end.
How a Lawyer Can Help:
Find All the Points: A lawyer can help make sure you have found all the rewards accounts.
Explain Your Options: They can tell you about buyouts, transfers, or other ways to split the points.
Write the Agreement: A lawyer will write your plan in the correct legal words for the court.
People Who Can Help:
Divorce Lawyers: They are experts in how to split property in a divorce.
Financial Experts: Sometimes, a money expert can help figure out the true value of points.
A Mediator: This is a person who helps both sides talk and agree without going to a judge.
Real-Life Story: A couple was fighting over their airline miles because they could not agree on their value. Their lawyer suggested bringing in a financial expert who knew about rewards programs. The expert wrote a report showing the cash value, which helped the couple finally agree on a fair buyout number.
Extra Insights
Keep Good Records: It is very helpful to keep good records of your reward points, even before you think about divorce. Keep monthly statements that show how many points you have. This will make it much easier to figure out what you have and what was earned during the marriage. Good records can prevent many arguments.
Think About Taxes: Sometimes, using or getting points can have tax effects. For example, if you get a cash-back reward, it is usually not taxed. But if your spouse transfers a large number of points to you, you should ask a tax expert if you need to report it. It is always smart to understand if your choices will affect your taxes.
Frequently Asked Questions
1. What if my name is the only one on the rewards account?
Even if the account is only in your name, the points are usually shared if they were earned while you were married. The court looks at when they were earned, not whose name is on the account.
2. Can I just use up all the points before the divorce is done?
You should not do this. A judge could see this as hiding property and could punish you for it in the final split.
3. Do points expire?
Yes, points and miles can expire. It is important to know the rules for each program so you do not lose their value while you are figuring out the divorce.
4. How long does it take to get a buyout payment?
The final divorce papers should say the date the payment is due. It is often within 30 to 90 days after the divorce is complete.
5. What if I do not know about all of my spouse’s accounts?
Your lawyer can help you find this information. There is a legal step where both people have to share all of their money information.
6. Is it expensive to transfer points to my spouse?
It can be. Many programs charge fees to move points from one person to another, and sometimes the value is lost.
7. Are hotel points treated the same as airline miles?
Yes, they are all seen as property. The process for finding their value and splitting them is the same for all types of rewards.
8. What if my spouse refuses to share the points?
If you cannot agree, a judge will order a split. Your lawyer will help show the judge why you should get your fair share.
9. Can we agree to not split the points at all?
Yes, if you both agree, you can decide to let one person keep all the points. This agreement should be put in writing in the final papers.
10. Do credit card points show up on a credit report?
No, the number of points you have is not part of your credit report. They are private to your rewards account.
11. What if the value of points changes during the divorce?
You should try to agree on a value at one point in time. It is common to use the value from the day you started the divorce process.
12. Can I use the points to pay for my lawyer?
Some reward programs let you turn points into cash. If you can do that, you can use that money for anything you want, including lawyer fees.
Figuring out how to handle reward points can feel like a lot of work. But it is an important part of making sure your divorce is fair. If you have questions or need help, please reach out to us. We are here to guide you.
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