How long you need to keep trust account records depends on who you are and what the account holds, but five years is the reliable working minimum for most situations, with three years at the short end and indefinite retention required when tax fraud or an unfiled return is involved. Attorneys work from the ABA’s five-year floor. Trustees and executors keep records through the life of the trust or estate plus a buffer. Banks operate under a five-year Bank Secrecy Act clock. And any account generating taxable income has an IRS retention timeline running in parallel that can outlast the professional rule.
Attorneys
ABA Model Rule 1.15 requires attorneys to preserve complete records of trust account funds for five years after the representation ends.1American Bar Association. Rule 1.15 Safekeeping Property The ABA’s Model Rules on Client Trust Account Records apply the same five-year window to all financial records tied to a client trust account.2American Bar Association. ABA Model Rules on Client Trust Account Records – Rule 1 Recordkeeping Generally
Five years is the floor, not the ceiling. States adopt their own versions of Rule 1.15, and many push the retention period out to six or seven years, with a few imposing longer obligations for specific record types. If you practice in more than one state, follow the longest applicable period. Check your state bar’s specific rule before you rely on the five-year figure.
Trustees and Executors
Personal trustees and estate executors don’t have a single federal statute setting a retention period. The practical timeline is shaped by two things: the fiduciary duty to account to beneficiaries, and the IRS statute of limitations on trust or estate tax returns. The Uniform Trust Code, adopted in some form by most states, requires trustees to give beneficiaries detailed reports of trust property, receipts, and disbursements. A trustee who destroys records early loses the ability to defend the administration if a beneficiary raises questions later.
Because trust administration can run for decades, the safe practice is to keep records for the life of the trust plus at least three to six additional years to cover tax audits and beneficiary claims. For estates, keep records for at least three years after the final estate tax return is filed, or six years if there is any chance income was underreported.
National banks acting as fiduciaries follow a federal rule: retain records for three years after the account terminates or after any related litigation concludes, whichever comes later.3eCFR. 12 CFR 9.8 – Recordkeeping
Real Estate Brokers and Mortgage Servicers
Brokers who hold earnest money, security deposits, or other client funds face retention rules set by their state’s real estate commission. These typically run three to six years after a transaction closes or funds are disbursed, but the range is wide enough that a general answer is risky. Your state licensing board publishes the specific number.
Mortgage lenders and servicers with escrow accounts have a separate federal obligation under the Truth in Lending Act. Closing disclosures and related documents must be kept for five years after the loan closes.4eCFR. 12 CFR 1026.25 – Record Retention Other lending disclosures carry a shorter two-year period.
Banks and Financial Institutions
Federal requirements layer. The Office of the Comptroller of the Currency sets the fiduciary-record baseline at three years after account termination or the end of related litigation.5eCFR. 12 CFR 9.8 – Recordkeeping The Bank Secrecy Act imposes a longer five-year retention period for records related to customer identity, transactions, and account activity, running from the date the account closes.6GovInfo. 31 CFR 1010.430 – Retention of Records
In practice the BSA rule covers a broader range of documentation than the OCC rule, so five years is the working minimum for most trust account records at banks.
IRS Retention Runs in Parallel
Any trust account that generates taxable income triggers IRS retention requirements that sit on top of the professional rules above. The IRS ties records to the statute of limitations on assessing additional tax, and that timeline is tiered.
- Three years is the standard period. The IRS generally has three years from the date a return is filed to assess additional tax, and records supporting income, deductions, and credits should be kept at least that long.7Internal Revenue Service. How Long Should I Keep Records
- Six years applies when more than 25% of gross income was left off the return. The same rule extends the assessment window for estate and gift tax returns where more than 25% of the gross estate or total gifts was omitted.8Office of the Law Revision Counsel. 26 USC 6501 – Limitations on Assessment and Collection
- Indefinite retention applies if no return was filed, or if a return was fraudulent. There is no time limit on IRS assessment in those situations.9Internal Revenue Service. Time IRS Can Assess Tax
Trust property with an ongoing cost basis is a separate case. Records used to calculate gain or loss must be kept until the statute of limitations expires for the year you dispose of the property.10Internal Revenue Service. Topic No. 305, Recordkeeping For a trust that has held real estate or securities for years, that means keeping purchase records and improvement documentation for the entire holding period plus at least three more years after the sale.
Which Records the Rules Cover
Retention rules apply to the whole file, not just the bank statements. Across professions, the core documentation is similar:
- Monthly bank statements showing all activity and balances.
- Deposit records, including deposit slips, wire confirmations, and documentation identifying the source of funds.
- Disbursement records: canceled checks, electronic transfer records, and withdrawal authorizations with supporting invoices.
- A separate ledger for each client, beneficiary, or matter.
- Monthly reconciliation reports.
- Account setup and termination documents — engagement letters, fee agreements, trust instruments and amendments, and final accounting or disbursement records. Federal regulations specifically require documentation of how each fiduciary account was established and closed, and these bookend records are the ones most often requested during audits.3eCFR. 12 CFR 9.8 – Recordkeeping
Electronic versions carry the same legal weight as paper originals under the federal E-SIGN Act, provided the electronic record accurately reflects the original and stays accessible in a reproducible form for the full retention period.11Office of the Law Revision Counsel. 15 USC 7001 – General Rule of Validity Scanned documents, cloud accounting records, and digital bank statements all qualify. A file format that becomes obsolete, or a cloud provider that shuts down, can turn compliant records into useless ones, so regular backups and periodic checks that older files still open are worth the small effort.
Why the Clock Matters
For attorneys, a violation of Rule 1.15’s record-keeping requirements can lead to professional discipline, including suspension or disbarment.12American Bar Association. ABA Model Rules on Client Trust Account Records Trust account violations are among the most common reasons for attorney discipline nationally.
Trustees and executors face financial consequences. Under the Restatement (Third) of Trusts, a trustee who fails to keep proper records is personally liable for any resulting loss. Courts reviewing an accounting with gaps resolve doubts against the trustee. A court can order surcharges for actual losses, reduce or eliminate trustee compensation, remove the trustee, or charge the trustee for the cost of reconstructing records. When a fiduciary can’t produce records to explain a withdrawal, deposit, or investment decision, a court can presume the worst — a presumption that is difficult to overcome.
Disposing of Records Once the Period Ends
Before destroying anything, confirm that no overlapping retention requirement still applies. The professional clock and the IRS clock often expire at different times. A record can satisfy your state bar’s five-year rule while still falling within the IRS’s six-year window for substantial income omissions. Destroy only after the longest applicable period has passed.
Federal law then requires reasonable measures to prevent unauthorized access to consumer information during disposal. Paper records must be shredded, burned, or pulverized so they can’t be reconstructed. Electronic records must be destroyed or erased so the data can’t be recovered.13eCFR. 16 CFR Part 682 – Disposal of Consumer Report Information and Records If you hire a document destruction company, verify their competence through references, certifications, or independent audits before handing over sensitive material.