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rob carrick

Customer loyalty points and travel miles are the forgotten financial asset in writing a will.

In many cases, these points can be transferred to a spouse or heirs. After you travel to the great beyond, they could be on a plane to Tahiti.

The people behind the popular Air Miles loyalty program did a survey recently that suggests only one in 10 loyalty program members know they can bequeath unused points or miles. Lucinda Main, an estate lawyer with Heenan Blaikie, confirms that points aren't often pondered by people when cataloguing what they'll pass along after they die.

"I have a very comprehensive 20-page standard estate planning questionnaire that I give to clients and this type of asset is almost always left out," Ms. Main said. She suggests avid points collectors consider three things:

  • Points and miles are an asset.
  • You may well be able to transfer them upon death.
  • There may be time limits or other restrictions.

Let's use the Aeroplan program as an example. If a member dies, a surviving beneficiary spouse or heirs can redeem the points on a one-for-one basis for a period of 12 months after death. A copy of the death certificates is required, and a processing fee of $30 plus tax is charged. Up to five beneficiaries can share in the points. The 12-month expiry is worth highlighting – points remaining after that period are forfeited.

LoyaltyOne, the company that owns and operates Air Miles, says the average Canadian household participates in 8.2 loyalty programs on average. Let's be honest – many people have an inconsequential number of points in their loyalty programs. But if you travel a lot for business or are diligent about collecting points through your day-to-day purchases, then your points or miles just might have serious value.

If you have trouble keeping track of all your points, consider using an online service or app to do the job for you. LoyaltyOne highlighted three such services:

AwardWallet: Join for free, add your loyalty programs and then have them monitored for you, including notification when points are about to expire. This is a U.S. site, but Canadian programs like Air Miles, Aeroplan, HBC Rewards, Optimum from Shoppers Drug Mart and PC Points (President's Choice) are included. Track your points and, in a limited number of cases, trade or transfer them from program to program. Many Canadian programs are included. Describes itself as a "digital travel wallet" and includes Air Miles and a few other Canadian reward programs.

When referring to points in your will, Ms. Main, the estate lawyer, suggests using wording along the lines of "my unused points that can be transferred." Mentioning your points prominently in your will alerts the executor to the need to move quickly and avoid forfeiture. It may also be easier to transfer points if the beneficiary is specifically mentioned in the will. Finally, saying who gets which points may forestall fighting between the beneficiaries named in your will.

"You've clearly set out your intentions," Ms. Main said. "Now, you don't have a child saying, 'Dad would have wanted me to get the points because he knows I travel all the time,' or the other child saying, 'Dad would have wanted me to have the points because I can't afford to travel.'"

The easiest way to deal with your points from an estate planning point of view is to use them up. Take a trip, use the points to buy stuff you can give as birthday or holiday presents, or convert the points into gift cards at stores you like. Also, some programs allow points to be converted into charitable donations. Don't expect a tax receipt if you do this. On its website, Aeroplan says its miles "do not have a monetary value associated with them and as such, are not eligible for a tax receipt."

Baby boomers have spent the most prosperous years of their lives using customer loyalty programs, and as they retire in the years ahead, they'll have to consider what to do with their points and miles. Ms. Main is thinking about getting ready for this trend by specifically addressing points in her estate planning questionnaire for clients.

People obviously need to be reminded about their points. A U.S. survey a few years ago found people are earning $205 more in rewards per year than they're cashing in. Over a lifetime, those unused points can add up to a substantial financial asset that's easily forgotten.

For more personal finance coverage, follow Rob Carrick on Twitter (@rcarrick) and Facebook (robcarrickfinance).

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