People spend years collecting miles, often dreaming of a perfect getaway or a special vacation. But when divorce enters the picture, those plans can feel at risk. Suddenly, the miles you’ve carefully saved might have to be split.
Divorce proceedings require meticulous attention to detail, especially regarding the equitable division of marital property. Among these assets, airline miles present a distinct challenge. As a valuable commodity acquired over long periods, determining its rightful distribution is not always simple. But you don’t have to face this challenge alone.
Halligan LLC’s dedicated team has years of experience handling divorce cases with complex property divisions. Our goal is to provide clarity and reassurance to our clients every step of the way. Let us guide you through this challenging time. Contact us today for a free consultation.
Airline Miles: Marital Assets or Separate Property
The distinction between separate and marital property makes all the difference in a divorce. While tangible assets such as real estate and vehicles come to mind, intangible assets such as accumulated miles can hold significant value and should not be overlooked.
Marital Property: Marital property generally refers to all assets acquired by either spouse during the marriage. This includes income, real estate, vehicles, retirement accounts, cryptocurrency, airline miles, etc.
Separate Property: Separate property, on the other hand, refers to any assets one spouse owned before the marriage. It also includes gifts or inheritance one spouse receives alone during the marriage. In most cases, separate property remains with the original owner after a divorce so long as the property is not jointly titled with the other spouse or otherwise commingled with marital property. Additionally, to the extent separate property increases in value during the marriage, the appreciated amount is considered marital property.
So, are airline miles considered marital or separate property? The answer largely depends on when and how miles were accumulated.
If these assets were accumulated during a marriage, they are considered marital property. However, if the airline miles were earned before marriage, they might be viewed as separate property.
Equitable Distribution in Colorado
In Colorado, marital property division during a divorce follows the principle of equitable distribution. This means that the court seeks to divide assets fairly, which may not be equally.
Many factors are considered when determining an equitable distribution of assets. Below are some key factors often taken into account:
Duration of the marriage: The length of the marriage may influence how assets are divided. Longer marriages may result in a more equal allocation of assets, while shorter marriages may see assets divided based on each spouse’s contribution; however, there is no black and white rule.
Each spouse’s economic circumstances: Each spouse’s current and future earning potential, as well as their financial needs post-divorce, can affect property division.
The value of marital property: When allocating property, it’s necessary to place a value on each asset and liability.
Changes in the value of separate property: If separate property increases in value during the marriage, this increase in value is considered marital property.
Debts and liabilities: Debts incurred during the marriage are typically considered marital debt, which may result in the shared responsibility of the parties, regardless of whose name they’re under.
Factors to Consider When Dividing Frequent Flyer Miles in a Divorce
When allocating frequent flyer miles in a divorce, there are several key factors to consider. These elements influence how the miles will ultimately be distributed.
Are the Miles Marital Property?
The first step to allocating airline miles in a divorce is to determine whether they are considered marital property. If a spouse had the airline miles prior to the marriage and the miles continued to be held solely by that spouse, then the amount of miles as of the date of marriage may be considered that spouse’s separate property, and any miles in excess of that amount may be considered marital property.
If the airline miles were acquired during the marriage, they are likely considered marital property.
If the airline miles are considered property of a business entity in which a spouse has an interest, the miles likely will not be divided in the divorce and instead would likely be considered in the valuation of the business interest.
Does the Airline Allow Transfers?
Some airlines prohibit flyers from transferring points and miles from one account to another, even in divorce situations. Others may charge transfer fees that could significantly reduce the miles’ worth.
Some loyalty programs allow splitting miles into two separate accounts with proof of divorce. In cases where airline mile transfers are not possible, the role of legal representation and negotiators becomes crucial.
How Much Are Your Miles Worth?
While it might seem easy, assigning a monetary value to airline miles is often more complex than simply multiplying the number of miles by a fixed rate.
However, this process can be complicated as the value of airline miles varies greatly depending on the airline, destination, time of booking, class, etc. Given these complexities, it’s advisable to seek legal help for an accurate appraisal.
Strategies for Dividing Miles Amicably in a Divorce
Dividing airline miles in a divorce can be overrun with disputes. However, there are strategies to ensure a fair allocation.
Mutual agreement: The simplest way to divide airline miles is for both parties to agree on a fair and equitable allocation. This could mean splitting the marital miles equally or deciding on a different distribution based on each spouse’s contribution.
Offsetting assets: If dividing the miles proves too complex or the airline’s policies prohibit transfers, you might consider offsetting the value of the miles with other marital assets. For instance, one spouse could retain the miles while the other receives another asset of equivalent value.
Getting legal guidance: Navigating these waters can be tricky, and having a skilled family law attorney can make all the difference. An attorney experienced in complex asset division can provide invaluable guidance, ensuring your interests are protected.
Contact Us for a Free Consultation
The division of intangible assets like airline miles adds a layer of complexity to any divorce. At Halligan LLC, we understand your concerns and are committed to assessing the value of your assets and protecting your interests at every step of the negotiation process.
Halligan LLC is a premier family law firm based in Denver. With a dedicated team with decades of experience, we provide personalized attention and tailored strategies for each unique case. Don’t face this complex process alone. Contact us today for a free consultation.
