In our firm, we’ve divided a lot of marital assets in divorce.
We’ve divided time with pets (dogs usually, no one cares about cats very much). We’ve divided garden gnome collections. We’ve divided cows — literally. We’ve divided most anything you can think of.
We’ve even divided airline miles.
You know, those airline miles you get on your awards credit card that you almost never use — about 75% of miles awarded are never redeemed.
Most of the time, people don’t even remember they exist. But when they do, we have to figure out how to divide them, which is more complicated than you would think.
Common Difficulties Dividing Airline Miles
The first difficulty in dividing airline miles is figuring out how many there are.
People usually have miles spread across multiple cards, which means all current statements need to gathered and examined.
The second difficulty is that some airlines and credit card companies will not divide airline miles in the event of a divorce.
You’ll have to check with your particular airline or credit card company to see if they miles can be divided. (Call them on the phone and ask. Trying to read the fine print to find the “divisibility of points upon divorce” clause will drive you nuts.)
If they do divide miles, the company will split the miles between two separate accounts, according to whatever agreement is reached during the divorce.
If they do not divide miles, you’ll need to find an offset somewhere else for the value of the points.
The third difficulty is valuing the points if an offset is necessary.
This is a most intractable problem because, exactly how do you value airline points?
Some types of airline points are worth more than others, and some airline points are worth more on certain credit cards than on others. Some points are worth more when redeemed on first-class flights as opposed to when redeemed on coach fares.
(Example: Nerdwallet.com did an analysis of Delta Sky Miles and found: “Delta Sky Miles are worth about 1.7 cents apiece, based on our analysis. Miles are worth the most (an average of 2.4 cents each) when redeemed for international business-class flights.”)
One usually effective way to value points is to go to the internet and see if anyone has done an analysis of your particular points. Most have been studied, so you’re likely to find something.
Of course, the most effective way to value points is to have an economist conduct an analysis on your particular situation. That makes no sense from a money perspective unless you have millions and millions of points built up. Almost no one has that, so finding an analysis online is the way to go.
Standard Points Value
What we’ve found through our research is points typically range in value from 1 cent to 2 cents.
What this means is that when negotiating Utah divorces, most people will agree on a points value in the neighborhood of 1.5 cents per point.
What this means in real life is that if you have 500,000 airline points, they’ve have a redeemed value of $7,500 (500,000 multiplied by .015). Splitting that value equally would mean each spouse would receive $3750.
As you can see, airline points don’t normally amount to much in a divorce, but when one spouse has accumulated a large number, they’re definitely something to do your research on and negotiate about.