Many older people tend to save their money in time deposits or passbooks because they feel it is safer than using an ATM. However, what they might not realize is that if an emergency occurs and they pass away suddenly, the process of closing their account can become a significant struggle.
This is exactly what happened to me. My mom was a strong, independent, and active woman, but the pandemic changed everything. She was forced to stay home for more than two years, and due to the sudden change in her routine, her health declined. The unexpected happened: she passed away in September 2023.
Weeks after her death, I faced a dilemma because, aside from her personal savings account, my own accounts were under her name. I asked some family friends if they knew the process for transferring ownership of the accounts to my name. Most of them said it would be a long process and would cost a fortune due to taxes. Some even urged me to forge her signature and gradually withdraw the money little by little. However, having been raised by my mom to be honest, I knew this wasn’t the right thing to do.
I decided to search online for guidance and came across a blog written by Ma’am Diane, who shared her experience of closing her deceased mother’s account without much trouble. Feeling optimistic, I went to the bank and explained my situation to them.
This might sound straightforward, but in reality, the process is quite challenging. One major factor is the branch manager handling your case. In my situation, the person managing my case was very unprofessional, which made things even more difficult. Another factor is your family situation, which can also be used by the bank to create delays or make things harder. Through this process, I learned a hard truth: banks use your savings to earn big profits while giving you very little, and they protect their interests more than anything else.
Here’s some insight into the process. If your deceased family member has property or bank accounts in their name, you must request extra copies of the original death certificate during the funeral process. These come at a cost—mine was 1,000 pesos per copy. You’ll need these original death certificates, as they are one of the primary documents required by the bank, publishing company, BIR, and SSS for death claims.
In addition to the death certificate, you will also need to prepare the following:
- Marriage certificate of the deceased and heirs
- CENOMAR (Certificate of No Marriage) if you and your siblings are unmarried
- Birth certificates of the deceased and heirs
- Passbook
- Two valid IDs of the deceased and heirs
- TIN ID and number of the deceased and heirs
- Accomplished BIR Form 1904
- Property title (if any)
After submitting all the documents, the bank will require you to execute an extrajudicial settlement and acquire a publication certificate.
For the extrajudicial settlement, you will need to find a lawyer to draft it. You will also need to submit a bank certificate and all the original copies of the property titles to the lawyer, who will submit them to the BIR. The BIR will then assess the taxes that need to be settled before you can transfer the remaining assets to your name. You will also need to find a newspaper company to publish the death notice of the deceased for two consecutive weeks. After that, they will issue a certificate, which you will need to submit to both the bank and the BIR.
For the BIR, you must visit the RDO (Regional District Office) in the city where the deceased passed away. Only after completing these steps will the bank release the funds to the heirs.
In some cases, the bank may also require an heir’s bond—this acts as insurance for the bank in case someone else comes forward to make a claim. The cost of the heir’s bond depends on the value of the money in the account, and you will also need to find two co-signers to serve as guarantors. Usually, people are hesitant to sign this because if something goes wrong, they could be held responsible. Fortunately, I was lucky to have friends who were willing to sign for me.
Why did I need this heir’s bond? I grew up believing my father had already passed away, but there was no official record of his death with the PSA (Philippine Statistics Authority). According to the law, if one parent is still alive, they have rights to all remaining assets. Since I knew nothing about my father beyond his name on my birth certificate and didn’t even know what he looked like, my attorney helped me submit a certificate of abandonment instead. This certificate was signed by two people who had known my mother for more than 30 years.
As I mentioned earlier, one major factor is the bank manager handling your case. As much as possible, document everything. In my case, when I noticed that the manager was deliberately causing delays that affected everything, I switched to communicating with her through text or email instead of phone calls.
I started the process in September 2023, but it took until December 2023 for the bank to provide the final requirements. It then took me from January to the end of April to get my assessment from the BIR. Once you’re done with the BIR, you can go back to the bank and ask them to withhold 6% of the value of the account. In my case, it took the bank from April until almost the end of July to withhold the 6%, and only after I became frustrated and asked them to share the penalty with me in case I couldn't finish processing the estate taxes within one year of death. Once this is done, you can proceed with the property transfer procedure.
As you can see, the entire process is very complicated. You will need to go back and forth between the bank, the BIR, and other government offices. It is not an easy task, especially if you are alone and still working to earn a living. I’m grateful to have had the support of some close friends, which helped me get through it somehow.
With that said, if you have a time deposit account under your name, I recommend changing it to an “OR” account and adding the name of a trusted family member or friend. This way, if something happens to you, your loved ones won’t have to go through this tedious and exhausting process.
Or better yet make a last will.