When couples decide to end their marriage, there are many issues to settle, including division of property, child custody, alimony, and more. In some cases, one of the most valuable assets may not be tangible; instead, it may be credit card rewards points, airline miles, or hotel points.
Many people collect these reward points over time intending to use them to travel, shop, or purchase other merchandise. But when a divorce occurs, who gets to keep these points?
It’s important to understand that Florida is an equitable distribution state, which means that marital property is divided fairly but not necessarily equally between spouses. Non-marital property, such as gifts or inheritances, is typically not subject to division in a divorce.
When it comes to dividing credit card points in a divorce, the distribution will depend on various factors, including:
Another factor that can influence the distribution of credit card points is the terms and conditions of the credit card. Some credit card companies may allow the transfer of points to another account, while others may not. In some cases, the points may have an expiration date, which will need to be taken into account when dividing the assets.
It is also important to note that not all credit card rewards are created equal. Some rewards programs may be more valuable than others, making it even more important to ensure that they are divided fairly. This can be particularly challenging if both spouses made purchases on the same card and earned points at different rates.
In some cases, couples may agree to split the rewards points as part of their divorce settlement agreement. This can be done through negotiation or mediation, with the help of attorneys or divorce professionals. If the couple cannot agree on how to divide the reward points, the court may be asked to make a decision.
When it comes to credit card points, the court will likely consider several factors in determining how to divide your marital assets, including but not limited to:
Valuating credit card points can be simple if you are involved in a cashback rewards program. However, determining the value of points can become more complicated if you receive other rewards like frequent flyer miles, dining and grocery rewards, gas credit, etc. You should work with a forensic accountant or financial professional to better determine point values.
While splitting rewards can provide financial benefits and compensate for lost assets and funds, it is important to consider the practicality of dividing points. It is crucial to analyze the amount of points accumulated, their type, and their redemption value—including any possible fees for dividing points or transferring them to a separate account.
Ultimately, we recommend weighing the cost and benefit of splitting credit card points, depending on the specific circumstances of each case. While it may seem appealing at first, dividing rewards may not be worth the effort and expense in the long run if the accumulated points are not substantial or redeemable for valuable rewards. It is also important to keep in mind any potential tax implications and to seek out professional advice when making any major financial decision.
Backed by decades of legal experience, Dale L. Bernstein, Chartered Law Office is here and prepared to help clients navigate divorce-related matters, including the division of property. When you retain our services, you can trust that we will fight for you to receive a fair and equitable divorce resolution.
Reach out to our team online or via phone at (727) 312-1112 to schedule an appointment.