[AL] [AL] Do my savings and checking accounts go into probate when I die?
Do my savings and checking accounts go into probate at my death or can they be accessed before? Does my alternate executor need to be on my bank accounts if they are on my durable power of attorney? Can I sell my house to my daughter for $1 and avoid probate?
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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 survivorship, they bypass probate and go directly to the named individual.
You said your daughter is POD on both accounts — so those will NOT go through probate.
Accounts without POD or joint ownership will go through probate.
2. Does your alternate executor need to be on your bank accounts if they’re on your POA?
No.
A durable POA only works during your lifetime, and ends at death.
An executor only acts after death and only through probate.
So there is no need to add your alternate executor to the accounts.
3. Can you sell your house to your daughter for $1 to avoid probate?
Not recommended.
A $1 sale can be treated as a gift, triggering:
- Possible tax issues
- Medicaid look-back issues
- Loss of step-up in basis (increases capital gains tax for your daughter later)
There are better ways to avoid probate, such as:
- A life estate deed (Alabama allows traditional ones)
- A revocable living trust
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Do my savings and checking accounts go into probate at my death or can they be accessed before? Does my alternate executor need to be on my bank accounts if they are on my durable power of attorney? Can I sell my house to my daughter for $1 and avoid probate?
I understand your concerns about your accounts and estate planning. Are you looking to ensure that your savings and checking accounts can be accessed easily by your beneficiaries upon your passing?
One daughter is on both accounts as POD... my other (alternate) is not.
Have you already designated an alternate executor in your will or trust, and are you considering adding them to your bank accounts as well?
I just want to know if I NEED to have my alternate on my bank accounts.
Is there anything else the Estate Lawyer should know before I connect you? Rest assured they’ll be able to help with your bank account concerns.
No.
What state are you 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 survivorship, they bypass probate and go directly to the named individual.
You said your daughter is POD on both accounts — so those will NOT go through probate.
Accounts without POD or joint ownership will go through probate.
2. Does your alternate executor need to be on your bank accounts if they’re on your POA?
No.
A durable POA only works during your lifetime, and ends at death.
An executor only acts after death and only through probate.
So there is no need to add your alternate executor to the accounts.
3. Can you sell your house to your daughter for $1 to avoid probate?
Not recommended.
A $1 sale can be treated as a gift, triggering:
- Possible tax issues
- Medicaid look-back issues
- Loss of step-up in basis (increases capital gains tax for your daughter later)
There are better ways to avoid probate, such as:
- A life estate deed (Alabama allows traditional ones)
- A revocable living trust
Is there an amount in my savings that I need to be concerned about? Over $50,000? At what point do capital gains kick in? What about cash on hand? How much can I gift each daughter per year?
Savings account value:
There is no limit, but probate is simpler if the estate total is under $34,611 (Alabama’s small estate threshold).
Your savings over $50,000 is fine — just make sure it has a POD designation.
Capital gains:
Does not apply to:
- Savings
- Checking
- Cash
Capital gains tax applies only if an asset like a house or stocks is sold for a profit.
Your daughter will get a step-up in basis on your house if she inherits it, drastically reducing tax.
Cash on hand:
Large cash amounts (especially over $10,000) should be documented to avoid tax or Medicaid issues. Cash also goes through probate unless already transferred.
Annual gifting:
- You may gift $18,000 per person per year (2025 limit) penalty-free.
- You can give $18,000 to each daughter every year.
I understand my home can only be sold after probate. What is the capital gains limit on that? Can she sell my vehicle or does that go into probate as well?
House sale after probate:
Your daughter inherits the property with a step-up in basis, meaning she pays capital gains only on the difference between the value at your death and the sale price, not what you originally paid.
Vehicle:
Yes, vehicles normally go through probate unless:
- Jointly titled with survivorship
- You filed a transfer-on-death form (if allowed)
Alabama requires probate unless the estate uses small-estate procedures.
What about gold and silver coins? Do they go through probate?
Yes. They do.
I can't think of anything else. Thanks for your help!
Richard
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