Banks may be required to explain withdrawals from a dead person’s account—Supreme Court

MANILA—Probate courts may require banks to explain withdrawals from a deceased person’s account, according to the Supreme Court in a decision involving the estate of former Negros Occidental 5th District Rep. Ignacio “Iggy” Arroyo. 

In the decision promulgated by the 3rd Division on July 7, 2026, the high court upheld the Regional Trial Court’s order which required Union Bank of the Philippines to explain withdrawals from the accounts of Arroyo and submit related email exchanges between the bank and a certain “Atty. Fe.”

During the settlement of Arroyo’s estate after his death in 2012, administrators Bernardina Arroyo Tantoco and Alicia Rita Arroyo found out that money had been withdrawn from the accounts after the death of Arroyo, without the knowledge of his heirs.

The administrators asked the RTC to require the bank to explain the withdrawals.

The RTC granted the request, which was upheld by the Court of Appeals, prompting the bank to challenge the rulings before the SC.

Union Bank claimed that the transactions were made under a survivorship agreement and argued that any attempt to recover funds should be brought in a separate civil case.

The SC, however, upheld the rulings of the lower courts.

The SC stated that probate courts, though having limited powers, may provisionally determine whether a property belongs to a deceased person’s estate.

“The Court finds that the directives requiring petitioner to further explain the withdrawals in question and to produce the specified email exchanges between its officers and Atty. Fe are well within the RTC’s authority in the settlement of the estate of Ignacio,” the SC said in the decision penned by Associate Justice Alfredo Benjamin Caguioa.

The SC ruled further that the RTC only sought to determine how much money was in the accounts when Ignacio Arroyo died and whether the funds should be included in the estate.

The high court also rejected the bank’s argument that the administrators were improperly seeking to recover the money.

“Their efforts to obtain clarification and supporting documentation on the questioned transactions must therefore be viewed as a legitimate exercise of their duty to ensure that all estate assets are properly accounted for and safeguarded for the benefit of Ignacio’s heirs and creditors,” the SC said.

The SC also emphasized that the probate court, not the bank, must determine whether funds covered by a survivorship agreement form part of the state.

The court said the bank effectively circumvented the rules governing claims against an estate when it unilaterally offset Ignacio’s alleged liaibilities against his deposits.

“It is well within the jurisdiction of the probate court to determine whether such offsetting is proper,” the court said.