SC: Banks must explain withdrawals from deceased clients' accounts

The Supreme Court has ruled that probate courts may compel banks to explain withdrawals from a deceased person's accounts to determine whether the funds should form part of the estate.

In a decision dated 7 July 2026, the Court's Third Division upheld an order directing Union Bank of the Philippines (UnionBank) to account for withdrawals from the accounts of the late Ignacio Arroyo and submit related communications.

The ruling, penned by Associate Justice Henri Jean Paul Inting, stemmed from a dispute involving funds withdrawn after Arroyo's death.

Estate administrators Bernardina Arroyo Tantoco and Alicia Rita Arroyo discovered the withdrawals and sought an explanation from UnionBank, including records of email exchanges between bank personnel and a lawyer.

The Regional Trial Court granted their request, a decision subsequently affirmed by the Court of Appeals.

UnionBank challenged the orders, arguing that the probate court had exceeded its authority. It maintained that the withdrawals were covered by a survivorship agreement and were partly used to settle Arroyo's outstanding obligations.

The bank also argued that recovering the funds required a separate civil case.

The Supreme Court rejected its arguments, explaining that probate courts may provisionally determine whether disputed assets belong to a deceased person's estate.

Under Rule 87 of the Rules of Court, probate courts may require persons suspected of concealing or taking estate assets to explain and account for them.

The Court stressed that estate administrators are responsible for identifying and protecting assets for heirs and creditors.

It also clarified that banks cannot independently determine whether funds under a survivorship agreement are excluded from estate proceedings.

The Court said creditors must pursue their claims through the probate court rather than unilaterally using estate assets to settle debts.

The ruling affirms the authority of probate courts to examine disputed transactions while the ownership and proper disposition of estate assets are being determined.