Get in line

When a person dies, the deposits left behind often constitute a substantial portion of the estate on which heirs and creditors rely. Yet bank accounts are also among the most vulnerable assets, as funds may be withdrawn or offset even before the heirs discover their existence. How far a probate court may go in tracing these funds is thus crucial to ensuring the complete and fair settlement of estates.

In Union Bank of the Philippines v Tantoco (G.R. E-02776, 7 July 2026), the Supreme Court, through Associate Justice Henri Jean Paul B. Inting, ruled that a probate court may require a bank to explain withdrawals made from a deceased person’s accounts and produce the corresponding records to determine whether the funds form part of the estate.

Bernardina Arroyo Tantoco and Alicia Rita M. Arroyo (Respondents) were the joint administrators of the estate of Ignacio T. Arroyo (Decedent), who maintained several accounts with Union Bank of the Philippines (Petitioner).

Upon reviewing his statements of account, they discovered numerous withdrawals made after the Decedent’s death without the heirs’ knowledge. They sought to compel Petitioner to explain these withdrawals and produce email exchanges between its officers and a certain Atty. Fe concerning withdrawal orders given on 1 October 2012.

UnionBank opposed the motion, invoking attorney-client privilege and the five-year record-retention period for banks.

The Regional Trial Court (RTC), sitting as a probate court, granted the motion. The Court of Appeals affirmed, holding that the RTC merely sought to establish a complete inventory of the estate without finally adjudicating ownership of the funds.

Before the Supreme Court, the petitioner argued that the RTC exceeded its limited jurisdiction as a probate court. It maintained that the withdrawals had already been sufficiently explained, having been made pursuant to a survivorship agreement to settle the Decedent’s obligations or authorized for the payment of estate taxes. It further contended that any recovery of the funds should be pursued in a separate civil action.

The Supreme Court disagreed.

While the jurisdiction of a probate court is limited, it may provisionally pass upon questions of ownership to determine whether property should be included in the estate inventory. Since the accounts were admittedly in the Decedent’s name, the RTC had the authority to ascertain their true balances at the time of his death. Any subsequent withdrawals were therefore relevant to that determination.

Moreover, Sections 6 and 7 of Rule 87 of the Rules of Court authorize probate courts to examine persons suspected of concealing estate property and require those entrusted with such property to render an accounting.

The Court further held that it is the probate court, not the bank, that determines whether funds covered by a survivorship agreement form part of the estate. Such agreements may be impugned when used to conceal inofficious donations, defraud creditors, or defeat the legitime of compulsory heirs.

Neither could Petitioner unilaterally offset the Decedent’s alleged obligations against his deposits. As a creditor, the bank must file its claims before the probate court. It cannot simply “skip the line” and give itself preferential treatment over other creditors.

The ruling serves as a reminder that a depositor’s death does not give banks free rein over the funds left behind. Banks must be prepared to account for transactions made after the depositor’s death. Creditors, including banks, must observe the orderly process of estate settlement.

After all, the law does not permit a creditor to take matters into its own hands merely because it happens to hold the deceased’s funds. In the settlement of estates, even banks must get in line.

For more of Dean Nilo Divina’s legal tidbits, please visit www.divinalaw.com. For comments and questions, please send an email to cad@divinalaw.com.