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Airline Miles And Divorce In Illinois
In an Illinois divorce every object or conceptual thing the couple owns, either together or apart, can be divided. Physical objects like paintings, animals, cars, houses, and photo albums can all be allocated in an Illinois divorce. Non-physical items such as patents, bitcoins, and royalties can also be allocated in an Illinois divorce…but not many people own these. There’s one conceptual, non-physical asset that most people do own: airline miles. So, how are airline miles divided in an Illinois divorce?
What Are Airline Miles?
Also known as frequent flyer miles, airline miles are sort of a virtual currency that can only be spent through one channel of commerce (your credit card). They can then only purchase one thing, plane tickets (some other travel expenses are usually available)
Airline miles are usually offered as a loyalty program through a particular airline and in conjunction with a credit card.
As the person travels, they accumulate miles through the frequent-flyer program. Those miles are recorded by the airline and can later be redeemed for an airplane ticket at a rate set by the frequent-flyer program.
Additionally, credit cards often partner with airlines to offer frequent-flyer miles and bonuses for every dollar charged to that credit card. In addition, purchases at certain vendors who are also participants in the same loyalty program will generate additional frequent-flyer miles for the spender.
For the average person, these miles have an extremely nominal value and can purchase a trip every few years.
Some people purposely game the frequent-flyer mile system by applying every purchase to a dizzying array of credit cards and making strategic purchases of trips that generate surplus miles. These people devote hours every month in order to earn a few free trips a year.
But the person who “plays the points and miles game” pales in comparison to the business owners who can put business expenses on credit cards. Business owners have the power to put hundreds of thousands of dollars on a credit card every year and earn real rewards that have real value: multiple first class trips a year worth thousands of dollars.
What Kind of Property Are Airline Miles Under Illinois Divorce Law?
Black’s Law Dictionary defines property as “The ownership of a thing is the right of one or more persons to possess and use it to the exclusion of others.” Black’s Law Dictionary (11th Edition)
Airline miles are a kind of property. You may not physically possess the airline miles but you want to be the only person who can decide how the airline miles are used.
In an Illinois divorce, all property is categorized as either “marital property” or “non-marital property.
“”marital property” means all property, including debts and other obligations, acquired by either spouse subsequent to the marriage.” 750 ILCS 5/503(a)
“Property acquired prior to a marriage that would otherwise be non-marital property shall not be deemed to be marital property” 750 ILCS 5/503(a)
So, airline miles will be classified as marital or non-marital based on when they were earned or if someone gave them to you.
“The court shall make specific factual findings as to its classification of assets as marital or non-marital property, values, and other factual findings supporting its property award.” 750 ILCS 5/503(b)
The non-marital property must stay with the person whose property is in their name.
“[T]he court shall assign each spouse’s non-marital property to that spouse.” 750 ILCS 5/503(d)
So, only the airlines miles deemed marital property shall be divided in an Illinois divorce.
How Do You Divide Airline Miles In An Illinois Divorce?
Once it is established which airline miles are marital, you can begin dividing them up between the two divorcing parties.
An Illinois court “shall divide the marital property without regard to marital misconduct in just proportions” 750 ILCS 503(d)
That’s right, “just proportions” is the standard for division of property in an Illinois divorce. Not 50/50. Whatever the parties negotiate or the judge believes is a fair division. This leaves a lot of wiggle room for the experienced Illinois divorce lawyer to work within.
The terms of most airline loyalty programs won’t allow for a division of airline miles. This incapacity to divide miles makes the calculus of the division of that marital asset difficult.
Some airline loyalty programs allow airline miles to be transferred but at a significant cost. This becomes a wasteful and diminishing action which both parties should object to.
So, airlines miles have to be valued and then some other marital property of similar value will be awarded to the non-airline-mile-possessing spouse in exchange for allowing the other spouse to keep his or her airline miles.
How Do You Value Airline Miles In An Illinois Divorce?
There is no standard formula for what an airline mile is worth. But there is a pretty good cheat code you can use during negotiations or pretrial.
Pick a trip from one random place in the world to another random place in the world.
See how many airline (also known as frequent flyer) miles you would have to redeem in order to travel to that location.
Then, find the price of the exact same trip. This is all very easy to do online.
Divide the price of that trip by the required airline miles to be redeemed. For example, If a trip from O’hare airport to Ft. Lauderdale on April 7 costs $ 500 or 50,000 frequent flyer miles, you calculate $500/50,000 for $.01 per mile.
Actually, this is the rule of thumb valuing airlines miles: a penny per mile.
Of course, if you play the “points and miles” game well, you know that a frequent flyer mile is probably worth more than a penny if you’re willing to strategically purchase and redeem those airline miles.
If that’s the case, you should negotiate more strongly for those airline miles or demand a higher value in exchange for those frequent flyer miles.
Credit Card, Hotel and Other Reward Points Systems In Illinois Divorce
Airlines may have started the point system but any seasoned traveller will be just as proud of their Marriot Bonvoy, Wyndham Rewards and/or Hilton Honors points.
Upscale department stores like Niemann Marcus also have exclusive membership point programs.
What’s more, many credit cards have their own individual point systems that can be traded in for trips OR cash. This cash trade-in makes it very easy to calculate the marital value of the points.
If there is a credit card, there needs to be at least a brief investigation into whether there is some point reward program associated with that card that can be used in the divorce negotiations.
Is It Worth Fighting Over Airline Miles In An Illinois Divorce?
Calculate your airline miles. Estimate the value of your airlines miles. Craft a strategy to negotiate and/or argue your theory to the opposing counsel and judge. This is going to take your divorce lawyer a few hours.
A few hours of a lawyer’s time is going to cost several hundred dollars.
Furthermore, an Illinois divorce judge is not going to be happy that you are using the court’s time to essentially divide your next free vacation. Most Illinois divorce judges refuse to hear anything about the division of furniture and household knick-knacks, let alone airline miles.
Fighting over airline miles may be a waste of time and money. Worse yet, fighting over airline miles may be a strategic blunder.
But, my philosophy in divorce negotiations is: if you don’t ask, you don’t get.