Disclaimer: The Electronic Commerce Security Act (ECSA) was repealed and replaced with the Uniform Electronic Transaction Act (UETA), effective June 25, 2021.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.

The length of time you are required to retain documents contained in a land trust file depends on the document type.

We believe that your bank should retain original trust instruments and their codicils and amendments permanently. 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.

If a land trust held property that was used as collateral for a loan, we recommend retaining the loan agreement — and any documents that might be relevant in a dispute involving the loan agreement — for ten years after the loan is paid off or discharged, since the statute of limitations for written contracts in Illinois is ten years. Also, we generally recommend retaining hard copies of any related mortgage notes, mortgages, and other documents recorded with a county recorder.

Although the Illinois Electronic Commerce Security Act generally sanctions electronic records, it does not apply to “negotiable instruments and other instruments of title wherein possession of the instrument is deemed to confer title” unless they are stored in a manner that “allows for the existence of only one unique, identifiable, and unalterable original . . . that can be possessed by only one person, and which cannot be copied except in a form that is readily identifiable as a copy.” Consequently, unless your bank possesses such electronic storage capabilities, we believe it would be prudent to retain hard copies of mortgage notes that are not disqualified as “negotiable instruments” under the Uniform Commercial Code (either because they include certain undertakings and conditions outside of the payment of money or contain a conspicuous statement that they are not negotiable), mortgages, and other recorded documents.

We believe that other documents in your land trust files may be stored electronically and should be retained for at least three years. This three-year retention period 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 the other documents in your land trust files, 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) (“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:

*    *    *    *    *

(2) to any rule of law governing the creation or execution of a will or trust, living will, or healthcare power of attorney; and

(3) to any record that serves as a unique and transferable instrument of rights and obligations including, without limitation, negotiable instruments and other instruments of title wherein possession of the instrument is deemed to confer title, unless an electronic version of such record is created, stored, and transferred in a manner that allows for the existence of only one unique, identifiable, and unalterable original with the functional attributes of an equivalent physical instrument, that can be possessed by only one person, and which cannot be copied except in a form that is readily identifiable as a copy.”)

• Illinois Code of Civil Procedure,735 ILCS 5/13-206 (“Except as provided in Section 2-725 of the ‘Uniform Commercial Code’, actions on bonds, promissory notes, bills of exchange, written leases, written contracts, or other evidences of indebtedness in writing and actions brought under the Illinois Wage Payment and Collection Act shall be commenced within 10 years next after the cause of action accrued . . . .”)
   
• UCC, 810 ILCS 5/3-104(a) (“Except as provided in subsections (c) and (d), ‘negotiable instrument’ means an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it:

(1) is payable to bearer or to order at the time it is issued or first comes into possession of a holder;

(2) is payable on demand or at a definite time; and

(3) does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, but the promise or order may contain (i) an undertaking or power to give, maintain, or protect collateral to secure payment, (ii) an authorization or power to the holder to confess judgment or realize on or dispose of collateral, or (iii) a waiver of the benefit of any law intended for the advantage or protection of any obligor.

• UCC, 810 ILCS 5/3-104(d) (“A promise or order other than a check is not an instrument if, at the time it is issued or first comes into possession of a holder, it contains a conspicuous statement, however expressed, to the effect that the promise or order is not negotiable or is not an instrument governed by this Article.”)
   
• 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 Fiduciary Rules, 12 CFR 9.2(d) (“Fiduciary account means an account administered by a national bank acting in a fiduciary capacity.”)
   
• OCC Fiduciary Rules, 12 CFR 9.2(e) (“Fiduciary capacity means: trustee, executor, administrator, registrar of stocks and bonds, transfer agent, guardian, assignee, receiver, or custodian under a uniform gifts to minors act; investment adviser, if the bank receives a fee for its investment advice; any capacity in which the bank possesses investment discretion on behalf of another; or any other similar capacity that the OCC authorizes pursuant to 12 U.S.C. 92a.”)