How long should our bank retain closed trust files in our trust department, which include trust instruments and attendant documents, such as transaction listings, paid checks, and bills? We currently retain hard copies of all of these documents.

Disclaimer: The Electronic Commerce Security Act (ECSA) was repealed and replaced with the Uniform Electronic Transaction Act (UETA), effective June 25, 2021. Please note that this change may affect the continued accuracy of this guidance as it pertains to the ECSA.

We believe that your bank should retain original trust instruments and their codicils and amendments permanently. Other documents related to an account for a trust should be retained for at least three years after the termination of the trust account or any litigation related to the trust account, whichever is later, and these attendant documents may be retained in electronic form.

The general rule in Illinois is that electronic versions of documents have “the same force and effect under the laws of this State” as hard copies of documents. However, this rule does not apply to trust instruments and their codicils and amendments, which means that such documents should be retained permanently in paper form.

Attendant trust documents, however, may be stored electronically and should be retained for at least three years. The three-year retention period for attendant trust documents stems from an OCC rule regarding “fiduciary accounts” related to trusts. The OCC requires banks to maintain “adequate” documentation of the establishment and termination of such accounts — which must be “separate and distinct from other records of the bank” — for three years after the termination of the fiduciary account or litigation related to the account (if any), whichever is later. For purposes of determining these time periods for attendant trust documents, your bank will need to determine which records are “adequate” documentation of your closed trust accounts and whether litigation has occurred within three years after closing the accounts.

For resources related to our guidance, please see:

Electronic Signatures in Global and National Commerce (ESIGN) Act, 15 USC 7001(a)(1)(“A signature, contract, or other record . . . may not be denied legal effect, validity, or enforceability solely because it is in electronic form.”)

Electronic Commerce Security Act, 5 ILCS 175/5-110 (“Information, records, and signatures shall not be denied legal effect, validity, or enforceability solely on the grounds that they are in electronic form.”)

Electronic Commerce Security Act, 5 ILCS 175/5-115(b)(2) (“Where a rule of law requires information to be ‘written’ or ‘in writing’, or provides for certain consequences if it is not, an electronic record satisfies that rule of law . . . . The provisions of this Section shall not apply to any rule of law governing the creation or execution of a will or trust, living will, or healthcare power of attorney…”)

OCC Fiduciary Rules, 12 CFR 9.8 (Recordkeeping. “(a) Documentation of accounts. A national bank shall adequately document the establishment and termination of each fiduciary account and shall maintain adequate records for all fiduciary accounts. (b) Retention of records. A national bank shall retain records described in paragraph (a) of this section for a period of three years from the later of the termination of the account or the termination of any litigation relating to the account. (c) Separation of records. A national bank shall ensure that records described in paragraph (a) of this section are separate and distinct from other records of the bank.”)

OCC Comptroller’s Handbook, Asset Management Operation and Controls, printed page 58 (“It is important to maintain those documents that substantiate fiduciary appointments and actions taken throughout the life of these accounts. . . . Banks should have policies and procedures that identify the proper retention periods for various records and should ensure that these records are stored, and at the appropriate time disposed of, with an appropriate level of information security. Record retention periods should conform to the requirements of applicable law. For example, OCC Regulation 12 CFR 9.8(b) requires a national bank to retain account records for a period of three years from the later of the termination of the account or the termination of any litigation relating to the account. . . .”)