Credit card rewards programs are a significant draw for those who use their cards responsibly. Many people in California use their credit cards strategically so as to optimize their rewards. However, during a high asset divorce, these become another complicated asset to value and divide.
It is important to determine whether the rewards points are either separate or marital property. If one individual can thoroughly demonstrate that they opened the card and earned all of its related rewards points before marriage, then he or she may keep them as separate property. In general though, rewards points earned during the course of a marriage are considered to be community property. This is true even if only one person opened the account and spent money on the card.
Determining whether the rewards points are separate or marital property is not sufficient for starting the division process. Couples also need to establish the cash value of the points. The value will vary between rewards programs, so it is generally not possible to figure out the value for one reward program and then apply that value to other programs. It is also important to keep in mind that some programs do not allow users to transfer rewards points to different accounts. Some do allow transfers under certain circumstances, and many that do also charge a fee for transferring.
While credit card reward points should not become a sticking point of property division, it is important to include them in the process to ensure that each person receives an equal portion of the marital assets. Figuring out what half of the marital assets looks like can be difficult in a high asset divorce. Working with a professional who can help untangle complicated and high-value assets can be helpful for California couples who are ready to divorce.