Tom was fairly successful in life and had a love for travel. To maximize his options, Tom was enrolled in several different programs which generated reward points. These points could then be redeemed for travel, hotel stays, car rentals, etc. Tom assumed that when he passed away, his accumulation of reward points would simply pass on to his kids, or whomever else he designated as part of his estate plan. Despite Tom’s intended plan, the reward programs had a different plan in mind.
Tom was enrolled in three specific reward programs, each of which was linked to a specific credit card:
- American Express
- Chase Marriott Rewards
When Tom died, his family was surprised to learn that each program had different rules regarding what happened to the reward points when the owner passed away:
In order to redeem the miles from Citi/Aadvantage, the intended beneficiary needed to open up their own account (assuming that beneficiary qualified for an account). Once the new account is opened, the reward program would transfer the balance of reward points to the new account. It is a simple roll-over transaction.
American Express only distributes the points of a deceased account holder in the form of gift cards. Every 10,000 rewards points may be redeemed in the form of a $50 gift card (there was a wide array of retailers to choose from). While this arrangement may not reap the desired points, who doesn’t like gift cards?
Chase Marriott Rewards
The policy of Chase Marriott Rewards was the narrowest. After an account holder dies, they will only transfer reward points to a surviving spouse or domestic partner. When it came to Chase Marriott Rewards, Tom did not have the opportunity to choose to whom his points would pass. In addition, because he did not have a spouse, the points were completely lost altogether.
There are definite benefits to reward programs and you can find them pretty much everywhere. It is now commonplace for banks, credit cards and stores to offer reward programs as an incentive to engage in additional transactions. However, before choosing an appropriate reward program for you, check into their policy for transferring those rewards upon your death. You may be surprised, like Tom’s family, that their specific policy is very different than what you intend. If that is the case, there is likely another similar reward program that better suits your desires.
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- What Should My Estate Plan Include?