There is no set rule as to how long trust records must be kept by a trustee, and the determination is usually based in part on the complexity of the issues facing the trust.
If, for example, there are complex tax issues, it could make sense to retain records for seven years or more. Trust records may include tax filings, distribution plans, bank account statements and receipts.
Keeping records is important because trust disputes can arise even after a trust has terminated. For instance, claims of fiduciary misconduct against a trustee can usually be filed three years (or, in some cases, four years) from the date the cause of action occurred.
As such, maintaining thorough and accurate records is essential to protect both the trustee and the beneficiaries if questions or challenges emerge after the trust’s closure.
