How are CDs cashed with the least tax impact?

Before dealing with the question of how the sisters divide their father's assets to have the least tax impact, they should  be ascertaining what their father wants to do with his own money.

If he is still mentally competent, it makes sense for him to consult with his lawyer regarding estate planning and his health care requirements.  Whether he will be able to be cared for at home, at what cost and by whom are central questions.  Planning should also be done with an eye toward what will the costs be if he requires long term care in a nursing home.  Transferring his assets to his children, even through a durable power of attorney can have adverse ramifications if Medicaid is applied for.  The fact that the sisters are all on the CDs does not change the fact that Medicaid would consider transfers of those assets to the girls as disqualifying transfers if he were to apply for Medicaid within the next five years.

If the girls are to perform caretaking activities for their father, a lawyer can prepare a contract whereby they can be paid for their services.

Ultimately, however, what should be controling is what is in their father's best interest.  If he is competent, he should consult with his lawyer.  If he is not, the girls should consult a qualified elder law attorney.