Prior to marriage and even if we were living together, my husband and I maintain separate bank accounts. Except for the expenses at home and for the kids, we follow the “What’s mine is mine, what’s yours is yours” rule. It’s not about being selfish. We prefer keeping our money separate but have a “common fund” to pay for the bills, household help, grocery and kids’ needs. 

When we got married, the husband decided to open a joint bank account. We still have our own separate money and accounts but having a joint bank account makes it convenient for us to easily deposit and get money since most checks are in my husband’s name. We opened a joint bank account where we pool our monthly contributions – and to save up for the rainy days. 

Here’s a hypothetical situation: what if something happened to me or my husband (knock on wood)? What will happen to our joint bank account? 

It is easy to say that any of us could withdraw the money anytime and use it for expenses, especially if it is an OR account. Unfortunately, that’s not how it goes.  

Paragraph 2, Section 97 of the National Internal Revenue Code states that – 

If a bank has knowledge of the death of a person, who maintained a bank deposit account alone, or jointly with another, it shall not allow any withdrawal from the said deposit account, unless the Commissioner has certified that the taxes imposed thereon by this Title have been paid

The joint account, or at least half of it since the law presumes equal sharing, becomes part of the estate. This means the estate taxes must be paid first before I or my husband could withdraw on our joint account. Once a BIR certificate is presented to show that estate taxes are paid, that’s the time I or he will be allowed to get money from the account. 

This is where Survivorship Agreement comes in… Survivorship AgreementThere are cases when banks allow its joint depositors to withdraw money even if one (or more) co-depositor is dead. In this case, a Survivorship Agreement comes into play. 

Survivorship Agreement is a contract wherein the parties agree that money in bank account or other certain properties are theirs in common. However, upon death of any one of the parties, such property will belong to the surviving party and has an effect of a donation. 

Since it is a contract, all you need is to present the said agreement (make sure to have it notarized please) on the bank then bank must respect such agreement and treat the surviving party as the owner of the joint account/s left. 

I talked to few people from the banks I transact with. Surprisingly, they can’t recall any of their depositors executing a Survivorship Agreement. There was even one manager who was shocked to find that there is such thing as a “Survivorship Agreement.” I was hoping I could get a sample form from them but it turns out, they haven’t heard of this too. 

Does this mean I can get the whole amount?

NO. A joint bank account is a joint ownership since the ownership belongs to two different persons – me and my husband. The law (Article 485 of the Civil Code) presumes that the portions belonging to co-owners is equal or in 50/50 shares, unless it is proved that it’s not.

Although I am allowed to withdraw from the joint account, this doesn’t mean I could get the entire amount. The 50% still belongs to me, although there is a 2003 BIR ruling that allows the surviving depositor to withdraw up to P20,000 ONLY. On the other hand, the remaining half will be included in the computation of the value of my husband’s gross estate under Section 85(B) of the Tax Code or what BIR people call “transfer in contemplation of death.” So yes, a BIR certification must still be presented so I could withdraw even the last cent. 

Is a Survivorship Agreement necessary? 

It depends on where you stand. After research, I realized that with or without the said agreement, joint accounts are on equal footing and estate taxes must be paid at all costs. 

Hence, it looks like opening a joint account is not a wise decision – unless you still maintain other separate accounts. Even if there is a survivorship agreement, the BIR will find a way to haunt you. Or, you could withdraw everything (yes, I’m trying to work on my humor here)!