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What state are you in?

Thank you for confirming you're in Alabama. Here's how these issues work under Alabama law:

1. Do savings and checking accounts go into probate at death?
   Not necessarily. If your accounts are set up with a POD (Payable on Death) or joint ownership with rights of survivorship, then they bypass probate and go directly to the named individual. You mentioned one daughter is listed as POD on both accounts—this means those accounts will not go through probate and will pass directly to her upon your death. However, any accounts that do not have a POD beneficiary or joint owner will likely go through probate.
2. Does your alternate executor need to be on your bank accounts if they are named in your durable power of attorney?
   No, they do not need to be on the accounts. A durable power of attorney (POA) gives someone authority to act on your behalf during your lifetime. That authority ends at your death. An executor (or alternate executor) is only authorized to act after your death and only through the probate process unless assets pass outside of probate (like with PODs or trusts). Therefore, the alternate executor does not need to be on the accounts unless you want them to have lifetime access (which can raise other issues). If the account already has a POD, there’s no legal need to add the alternate executor.
3. Can you sell your house to your daughter for $1 and avoid probate?
   Selling the house to your daughter for $1 is not an effective way to avoid probate, and it may raise tax implications (gift tax and basis issues). Instead, consider one of these more appropriate methods:

• Life estate deed (also called a "Lady Bird Deed" or enhanced life estate deed in some states)
• Transfer-on-death deed (TOD), if available in Alabama (not currently authorized under Alabama law)
• Outright deed transfer with retained rights or in trust

If avoiding probate is the goal, it's better to consult your options carefully because a $1 sale can be viewed as a gift, not a true sale, and it may trigger unintended Medicaid eligibility issues or create capital gains consequences for your daughter later.

Summary:

• Your POD accounts already bypass probate—no need to add your alternate executor.
• A durable POA ends at death—executors act after death, via probate.
• Selling your house for $1 won’t effectively avoid probate and may create tax complications; other estate planning tools are better suited.

If you have any follow-up questions, please let me know.

Great questions—here’s a breakdown tailored to your situation in Alabama:

1. Is there an amount in savings to be concerned about?
   There’s no specific limit on how much you can have in your savings account for probate or estate purposes, but you should be aware of a few key thresholds depending on your goal:

• Probate threshold: In Alabama, small estate procedures are available if the estate is under $34,611 (adjusted annually). If your estate exceeds that amount, it will likely go through full probate unless your assets are structured to pass outside of probate (like PODs or trusts).
• FDIC insurance limit: Make sure your total deposits in any one bank don’t exceed $250,000 per account holder per bank to stay fully insured.

So, having over $50,000 in savings is not a problem legally, but if you’re trying to minimize probate, you’ll want to ensure those funds are designated with POD or held in trust.

2. When do capital gains taxes kick in?
   Capital gains tax does not apply to savings accounts—it applies when you sell capital assets like real estate, stocks, or mutual funds.

• Example: If you sell your home during your lifetime at a profit, you could owe capital gains tax depending on the amount and how long you owned it.
• If your daughter inherits the house, she gets a step-up in basis (value reset to fair market value at your death), which minimizes or eliminates capital gains if she sells it shortly after.

Capital gains don’t apply to "cash on hand" or bank savings.

3. What about cash on hand?
   You can hold as much cash on hand as you want, but:

• If it exceeds $10,000 and is kept outside the banking system, it may raise red flags for tax or Medicaid purposes.
• It’s a good idea to document the source of large amounts of cash if you plan to give it away or use it for significant expenses.

Also, cash on hand is still part of your probate estate unless it’s transferred by some other legal mechanism.

4. How much can you gift each daughter per year (2025)?
   In 2025, you can gift up to:

• $18,000 per person per year tax-free under the annual gift tax exclusion.

You can give:

• $18,000 to each daughter every year without having to file a gift tax return.
• If you're married, you and your spouse can jointly gift $36,000 per daughter per year.

No gift tax is owed by the recipient. You would only need to file a gift tax return (IRS Form 709) if you exceed the annual exclusion, and even then, you're unlikely to owe tax unless your lifetime gifts exceed $13.61 million (2025 federal exemption).

Summary:

• Savings over $50,000 is fine but consider POD to avoid probate.
• Capital gains don’t apply to savings or cash, only to the sale of assets like real estate or stock.
• Try to avoid keeping large amounts of untraceable cash on hand.
• You can gift $18,000 per daughter per year without any tax implications.

Thank you for your follow-up. You also asked:

Can my daughter sell my home before probate is completed?
No, not unless the home was previously transferred out of your name or placed in a trust. If the home is titled solely in your name at death and not jointly owned or in a trust, then it must go through probate before anyone—your daughter or your executor—can legally sell or transfer it.

The probate court must first appoint a personal representative (executor) who is authorized to act on behalf of your estate. Once appointed, the executor can sell the property with court approval, depending on the terms of your will and local procedures.

What are the capital gains consequences if my daughter sells the home after inheriting it?
If your daughter inherits the home after your death, she will receive a step-up in basis to the fair market value as of the date of death.

Example:

• You bought the home for $100,000.
• It's worth $300,000 when you pass away.
• She sells it shortly thereafter for $305,000.
• Her capital gain is only $5,000, not $205,000.

This minimizes or avoids capital gains tax entirely. If you sell or gift the home to her during your lifetime, she takes your original cost basis, which could mean a larger capital gain and tax liability if she sells later.

What about your vehicle—does it go through probate?
Yes, unless:

• It's titled jointly with right of survivorship, or
• You've designated a transfer-on-death (TOD) beneficiary (if allowed in Alabama).

If neither of those apply, the vehicle is considered part of your probate estate. However, Alabama does offer a simplified transfer process for vehicles if the estate qualifies as a small estate.

Summary Recap:

• House: Must go through probate unless transferred to a trust or co-owned with survivorship rights.
• Capital gains: Step-up in basis at death helps avoid capital gains tax if sold shortly after inheritance.
• Vehicle: Goes through probate unless jointly titled or has a TOD beneficiary (check with the Alabama DMV for forms).
• Executor or daughter cannot sell your home or vehicle until probate opens and they are officially appointed.

Yes. They do.

If you have any follow-up questions, please let me know.