BIZ BUZZ: Joint deposit woes

It’s heart-breaking enough to suddenly lose a family member to COVID-19. But what’s even more challenging is fixing the estate of the deceased, especially the “or” deposit accounts, if the pertinent bank has internal protocols that are tougher than most peers’.

The thing is, banks seem to have varying policies when it comes to joint accounts, particularly the “or” account. The “and” account is usually clear-cut, but in the case of the “or” account, it seems to be the bank’s choice on how to treat its clients. When a codepositor in an “or” joint account dies, most banks won’t refuse partial cash withdrawal (in proportion to the number of signatories) by the surviving codepositors.

Heirs of a prominent family of lawyers thus got the shock of their lives when this particular bank turned out to be a big pain in the neck—when some other bigger banks were very much accommodating—when a codepositor among the heirs was withdrawing part of the “or” accounts shared with the late father.

While other banks readily released half of the funds under the same “or” account arrangements, this particular bank insists that the heirs produce an extrajudicial settlement before releasing any funds, even from the “or” accounts.

The heirs, thus, had to seek assistance from the Bangko Sentral ng Pilipinas (BSP), pointing out that under the Tax Reform for Acceleration and Inclusion Law, the estate tax return is no longer a prerequisite to withdraw funds from the bank account of the deceased.

As clarified by the Bureau of Internal Revenue (BIR) itself in a circular on joint accounts, the executor, administrator or any legal heir/s may be allowed withdrawal within one year from the date of death of the depositor/joint depositor for as long as the amount withdrawn would be subject to the six percent final withholding tax, covering the share of the decedent.

“Thus, clearly if the account is in the name of two or more depositors, the six percent withholding tax shall only be imposed on the share of the deceased in the joint bank account, should the heirs decide to withdraw it,” the complaint said. As such, the heirs added that the other half, or 50 percent of the “or” account, was supposed to be clean and there is no compelling and valid reason for the bank to disallow the withdrawal by the codepositor.

The heirs lamented that the bank was just “making it hard for us, their depositors, to access and withdraw from our accounts when the law is very clear on this matter.” For its part, the bank said that before allowing the requested withdrawal, and invoking the BIR guidelines, the heirs should present a copy of the tax identification number of the estate of the decedent and BIR Form 1904 of the estate duly stamped received by the BIR. Moreover, the bank argued that the same circular “explicitly provides that it shall not be construed as preventing the bank from requiring pertinent documents in accordance with its existing policy.”

“It is true that in a joint deposit account, it is presumed that the joint depositors equally own the deposit account absent any contrary agreement. Nonetheless, the bank cannot simply allow any withdrawal from an account maintained with a codepositor who died already without clearly determining the proper share or claim of the estate of the deceased depositor in the account, and the best evidence for this is the extrajudicial settlement of the decedent’s estate specifically stating the share of the deceased depositor in the subject bank accounts,” the bank said.

This family is not alone in this predicament. There are so many unfortunate heirs being given the runaround by some banks. Imagine those cash-strapped families who have to settle big hospital bills, especially if the death of the codepositor was COVID-related. If one bank claims to be simply exercising utmost diligence, are the more accommodative  banks less diligent or just more considerate? In this day and age of cutthroat competition in the banking space, codepositors of “or” accounts must clarify the policy of their respective banks while all signatories are still alive. Any guidance from the BSP’s Consumer Protection and Market Conduct Office will also be useful to banks and depositors alike. —Doris Dumlao-Abadilla

No toll

Since the COVID-19 pandemic erupted, conglomerate San Miguel Corp. (SMC) has implemented the “no toll fee” policy for medical front-liners at its tollways. This accommodation has continued to date, even if the national vaccination program has started.

SMC estimated yesterday that such waivers for about 10,000 medical front-liners have so far reached P230.7 million. These doctors, nurses, medical and laboratory technicians have been granted free access to Star Tollway, South Luzon Expressway, Skyway System, Naia Expressway, and Tarlac-Pangasinan-La Union Expressway, since March 2020.

“We started this program last year, to show our appreciation and support for our hero medical workers who risk their lives every day to save others, despite the threat of COVID-19. More than one year has passed and they have accomplished so much in the fight against the pandemic. With most of them now vaccinated, we are honored to have stayed with them and supported them all this time through this gesture of free toll,” said SMC president Ramon S. Ang (RSA).

“To all our health-care professionals, we applaud your dedication to serve. Through this program, I hope you feel our gratitude,” he added.

On top of its free toll program, the company has also spent more than P1 billion for medical-related donations and initiatives, including donations of RT-PCR COVID-19 testing machines, automated RNA extraction machines, personal protective equipment and over a million liters of ethyl alcohol to various hospitals around the country. —Doris Dumlao-Abadilla