What Happens to Your Points and Miles When You Die?

**Chris Hutchins** (0:00)
A man named Thomas spent years saving 878,000 Capital One miles for a dream trip to Italy with his family. Then in 2024, he died unexpectedly, and his wife Linda did the thing any reasonable person would do. She called Capital One hoping to transfer the miles to her own account. Instead, they closed the account and mailed her a check for $4,390.
That is half of what those miles would have been worth just reimbursing travel purchases, and a small fraction of what a really good redemption would have gotten them. The thing is, none of that had to happen. When you understand how this system works, you can plan ahead, leave the right instructions, so no one has to figure it out in the worst week of their life, whether you're planning for yourself or for someone you love. So I went deep on this one. Every major bank, airline and hotel program, what the terms actually say versus what really happens, hundreds of posts from families who lived through it, and I even emailed a few programs directly to get answers that aren't published anywhere. By the end, you'll know how the system works and what to actually do about it, whether you're planning for yourself, helping a parent plan or sorting it out after the fact when no one planned at all. I'm Chris Hutchins. If you enjoy this episode and you want to keep upgrading your money, points and life, click follow or subscribe.
Okay, so talking about death is not fun in any way, shape or form, but it's something that I think is important because the rules here are very different amongst every single program. Some ranging from super friendly to really just not friendly at all, but at the end of the day, the biggest thing driving this is that nearly every single rewards program has the same language. And that is that your points are not your property. They have no cash value until they're redeemed and they can control them, which is why you can't actually put them in your will because they're not your property to begin with. The Delta's is very clear, miles are not the property of any member. So you can't give them away and they're really just a contract that at death oftentimes is handled at the sole discretion of the airline, the bank, or the hotel program. So if that's the case, what is the right thing to do? And in this episode, I'm going to break down both what you could consider doing and what the policy says, and there might be some deviation from there. So I'll make some suggestions on how you can kind of really tighten the case, especially with any instructions you leave or someone else leaves to really make sure that there aren't any legal issues that pop up. Another question is whether you are actually allowed to access the Frequent Flyer Mile accounts or hotel loyalty program accounts of a family member who passed away.
I am not a lawyer. I don't know whether that is clearly legal or against the law. It might violate the terms of service of an account, but that doesn't make it a crime. There is a very big difference between breaking the terms of service and committing a crime or a felony or something like that. I am not a lawyer. I am not going to tell you what you can and can't do. I am just going to explain what I have read through a ton of research going into this episode. There is another question which is can you preauthorize this? Can I just give that permission to someone in advance?
You can put information in your will or a trust you have set up that says my executor or my heirs can do these things as they see fit. You could convey authority in that situation which might help you from certain situations but it's not necessarily going to protect you in any way, shape or form from whatever Delta or United might say in their terms of service. Also when it comes to taxes, again I am also not a tax advisor but points are not generally taxable as income because they have no cash value as we have just discussed. They're not property and so there's no real established IRS tax treatment. I did do an episode on this but we didn't really cover the circumstance of value in this circumstance as an inheritance. Now if you did cash those points out as income, then that income might get treated as part of the estate and so I am going to not address the tax situation here because I'm just not an expert here. So if the answer is you can't just will, not the power of will, but actually a physical will document or a trust convey your points to anyone because they're not property, then what do you do?