Family Law: 21 June 2023
Author: Phoebe Smillie - Our People
When going through a family law property settlement, most of the negotiations are largely focused on the division of marital assets such as real estate, shares, motor vehicles, and cash.
But have you ever wondered what happens to frequent flyer points in a settlement? Often frequent flyer points fly under the radar; however, if you are person who enjoys travelling and/or have accumulated a substantial number of points, they can be quite valuable.
The short answer is, yes!
To the surprise of many, frequent flyer points are deemed an asset in family law proceedings and, as such, can be included in the asset pool available for division.
Before considering a division of frequent flyer points, however, it is important to first check the airline’s terms and conditions with respect to their transfer policy. For example, Qantas allows a person to transfer a portion of their points to eligible family members at a limit of 600,000 points per transfer per year.
Valuing frequent flyer points is not a simple task and is a point judges have previously struggled to determine. Whilst some loyalty programs offer cash equivalents for points, often this is not the case leaving parties with a difficult task of roughly converting points to an estimated cash value.
For example, in the case of Herouz & Herouz  FamCA, the Court did not allow frequent flyer points to be included in the asset pool as the parties did not provide any expert evidence that enabled the Court to make a determination of the monetary value of the frequent flyer points.
In other cases, whilst the Court did not ascribe a value to the frequent flyer points, it made Orders for the frequent flyer points to be divided and transferred between the parties.
For example, in the case of Sebastian & Sebastian (No 5)  FamCA the Husband held 3,470,604 Qantas frequent flyer points and the Wife held 925,000. The Husband roughly estimated the frequent flyer points were valued at 0.074 cents per point. The Wife sought Orders for the Husband to transfer to her 2,000,000 points. Ultimately, the Court did not place a monetary value on the points; however, it did find it was just and equitable to make Orders for the Husband to transfer to the Wife 1,000,000 frequent flyer points.
Whilst the division of frequent flyer points is a niche issue, it is important you obtain legal advice as to the division of your asset pool if you are going through a separation. If you require advice with respect to your family law property matters, please contact me or a member of our experienced Family Law Team.