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-   -   Miles & Points in Divorce Settlement (https://www.flyertalk.com/forum/milesbuzz/475447-miles-points-divorce-settlement.html)

chicaloca453 Sep 23, 05 12:16 am

Miles & Points in Divorce Settlement
 
I'm sure there's some expert FTer who can answer this question for me. I have a good friend who is seeking a divorce. Her husband has racked up 400,000 MR points, 300,000 HH points, 25000 Holiday Inn points, plus miles on US and DL. She is seeking half in the divorce settlement because she believes the fact that he spend 250 nights in a hotel last year contributed to the demise of their marriage (well that plus a few other things I won't go into).

My question is this:

Is it possible for him to transfer half his points and miles into her name as a condition of the divorce? He's agreed to it, but we're not sure it can be done. I know DL has share miles. US does not. Does anyone have any experience/expertise in this matter who can help me out?

This information is not for me! I'm too smart to get married. lol But I'd really like to know what to tell my friend about this.

Thanks for your help.

dhuey Sep 23, 05 12:25 am

The programs are pretty clear on this -- you can hardly ever transfer miles to anyone else. Of course, they might make an exception in the case of a divorce, so your friend would need to contact the customer service desks to see if that's possible here.

Another possibility is he gives her a sum of cash meant to equal half the value of those points & miles. This might be a better option for her if he, like many, overestimates the value of the points/miles.

CaveatEmpty Sep 23, 05 7:30 am

Cash value? Methinks you don't want to go there.
How many times have we heard about 'winners' that turned down their miles/points 'prizes' because of the tax liability... is she ready to fork over a fat % of the take ?

Smart choice: one can book award travel/stays to 'gift' to another party.

Leads one to wonder if the interest is in actually *using* the points, or just burning the guy... :rolleyes:
/.

flytoeat Sep 23, 05 8:32 am

When my sister did this, she booked award travel/stays one year out on the non transferable accounts and transfered MR points into her own accounts. This was done prior to to finalization and was part of the divorce decree.

Schutzee Sep 23, 05 8:39 am

Hilton set up a new account for my ex and transferred in 150,000 points from my account. All they asked for was a copy of the pertinent page of the separation agreement. YMMV with other programs.

There has been at least one other thread on this subject in the past. See if search yields any results.

gemac Sep 23, 05 10:02 am


Originally Posted by CaveatEmpty
Cash value? Methinks you don't want to go there.
How many times have we heard about 'winners' that turned down their miles/points 'prizes' because of the tax liability... is she ready to fork over a fat % of the take ?

Smart choice: one can book award travel/stays to 'gift' to another party.

Leads one to wonder if the interest is in actually *using* the points, or just burning the guy... :rolleyes:
/.

I'm not an attorney, let alone (heavens forbid) a tax attorney, but generally speaking, there is no tax liability associated with division of property in a divorce. The general theory is that each party owned half of all the "stuff" when married, and that each party owns all of half the "stuff" after the divorce. The I.R.S. doesn't want to get into whether the division results in two equal halves or not. Your friend should consult her own attorney about the tax implications of what she is doing, but I would be very surprised if he told her that there might be taxes to pay on cash in lieu of miles, points, or any other asset.

In my mind, it shouldn't matter to us whether she is interested in using the points or not, the same as it shouldn't matter if the person who ends up with the house intends to live in it afterwords or intends to put it on the market and get more suitable digs. If the two parties agree on how to divide their assets, who are we to question it? If they don't agree, the court will impose a division, which I don't recommend.

Efrem Sep 23, 05 10:42 am

Division of property rules/laws don't apply because miles/points are not the property of the spouse. They're the property of the hotel/airline, earned by and usable by the spouse under program terms and conditions, yadda yadda. Legalese, I know, but it affects how this works.

As previously posted, many programs go along with divorce settlements in this regard. There might be a small fee for the transfer, but what doesn't have a fee these days?

However, let's step back and think about the big picture. I'd value those miles and points at somewhere in the high four figures. Half of it is in the low-middle four figures. It would be a lot easier, if the parties and their lawyers are civil enough to think in these terms, to come up with something else worth about the same and give her that.

(I was fortunate enough to have my divorce handled by a mediator rather than by duelling lawyers. We approached a number of issues this way, though not specifically miles/points since I wasn't heavily into them at the time. I think we ended up with several win-wins and credit much of our remaining civil since then to this approach.)

dhuey Sep 23, 05 11:36 am


Originally Posted by CaveatEmpty
Cash value? Methinks you don't want to go there.
How many times have we heard about 'winners' that turned down their miles/points 'prizes' because of the tax liability... is she ready to fork over a fat % of the take ?

Smart choice: one can book award travel/stays to 'gift' to another party.

Leads one to wonder if the interest is in actually *using* the points, or just burning the guy... :rolleyes:
/.

There are no "prizes" in divorce court. I'm sure the litigants there do not confuse the experience with being on The Price is Right. Yes, tax issues come up in divorce settlements, but this matter is a straightforward division of assets with no income tax implications.

dhuey Sep 23, 05 11:39 am


Originally Posted by Efrem
...(I was fortunate enough to have my divorce handled by a mediator rather than by duelling lawyers. We approached a number of issues this way, though not specifically miles/points since I wasn't heavily into them at the time. I think we ended up with several win-wins and credit much of our remaining civil since then to this approach.)

Bravo! to you and your ex. It's depressing to see how many divorcing couples take an awful situation and turn it into a financial calamity by paying lawyers big bucks to inflict pain on the other.

MSY-MSP Sep 23, 05 12:16 pm

As an attorney let me offer my thoughts on this. (BTW this is not legal advice) From what I remember there are a few cases in various states that address this specific issue. Depending on the state the miles/points thing is handled differently. (Hey maybe I could write an article on this for Inside Flyer, if it hasn't been done already). There are at least two common ways this is handled. The first way is in the divorce decree the court allocates a certian % of the miles/points to the other spouce. The owning spouce then must keep that number of miles in the account at all times for the use of the other spouce. WHen the other spouce wants to use the miles/points the owning spouce must make the booking, and reduces the mileage balance accordingly. The second common way of distributing miles/points is the cash value approach. Typically, the value is determined using the purchase value of the miles that the program provides. This can be the cost of purchasing miles from the program directly by the member, or it can be the price the program sells miles to participating companies. So the value of the miles can fluctuate quite a bit depending on which calculation is used. One may argue for the $.01/mile valuation, while the other will argue for the $.10/mile valuation. It can get messy here. I have seen a third way this is done, is that the court orders the program to split the account. In this case it then falls to the program to decide how to deal with the court order, terms and conditions notwithstanding.

chicaloca453 Sep 23, 05 12:24 pm


Originally Posted by CaveatEmpty
Cash value? Methinks you don't want to go there.
How many times have we heard about 'winners' that turned down their miles/points 'prizes' because of the tax liability... is she ready to fork over a fat % of the take ?

Smart choice: one can book award travel/stays to 'gift' to another party.

Leads one to wonder if the interest is in actually *using* the points, or just burning the guy... :rolleyes:
/.



Yes, she does actually want to use the points for future trips. She also feels like she's partly earned them too given how much traveling he did for his job. They never saw one another. She worked as well, so it wasn't like she was out there enjoying the perks of travel. She just wants to be able to enjoy her fair share of the travel in the future. The hotel points are the most valuable to her because anyone can afford an airline ticket now. But a week in Maui is a lot better deal at 120,000 MR points than at $300/night. She isn't the breadwinner, and it is the only way she can treat herself to a nice trip like that.

As far as buring the guy, well he burned her pretty bad too. There was a lot of unprotected extracurricular activity in said hotel rooms. But that isn't the issue. The issue is that his travel was at least partly to blame for the dissolution, and she earned it as well with her spouse out more than 2/3 of the year. She sat at home alone and took care of the kids and family needs while he was out doing his job. She should at least feel the perks as a credit for what she did at home while he was out on the road. But I won't go there anymore. This thread is about points and miles not about anythig else. And I don't want it to close.

I did a search with the word divorce, and this was the only post I found. I will try expanding my search later. It is nice to know Hilton will do it. And if the person whose sister did this in MR could PM me and give me more information, that would be great.

luv4miles Sep 23, 05 12:37 pm

chicaloca, i went thru a divorce myself several years ago and my ex (wife) wanted 50% of all my miles. It depends on each program rules. AMEX MR will split them by providing copies of divorce certificate, etc. She actually did the motions as I really didn't want to lose 'em. Some of the airlines programs will refuse to split them. Good luck to your friend.

dhuey Sep 25, 05 12:33 am


Originally Posted by chicaloca453
...There was a lot of unprotected extracurricular activity in said hotel rooms. But that isn't the issue. ....

Yikes. I can see why those hotel points will be a sensitive issue in this divorce.

goingsomewhere Sep 25, 05 12:39 am

I think they are splittable if the appropriate documents end up in the hands of the frequent guest programs.

What state is this in?

barefootflying Sep 25, 05 1:32 am

A friend of mine... ok fine.... it was me... gone through the
same thing. Instead of giving up half of the 370,000 miles
in a settlement, a phone call was placed to the program
asking if the miles/award ticket can be sold on Ebay.

Two days later, the acct was frozen. That was 3 years ago
and the miles are still frozen. The airline is still bankrupt
and they are in no hurry to resolve this.(which is just fine
by me)


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