How Long to Keep Settled Estate Papers

By Laura Payet

How Long to Keep Settled Estate Papers

By Laura Payet

Being an executor is a difficult job in the best of circumstances. Once the estate is finally settled, your fondest wish may be to jettison all of the paperwork you've accumulated in the process. But hold on before you fire up the shredder—experts recommend keeping most estate records for seven to 10 years after the date the estate is finally settled because of the potential for an Internal Revenue Service (IRS) audit or belated claims from creditors and heirs.

Stack of paperwork

Potential Claims and Statutes of Limitations

Your responsibilities as the executor of an estate include probating the will if there is one, notifying the heirs, assembling and appraising the assets, notifying and paying off creditors, settling tax obligations, and ultimately making distributions to the estate's beneficiaries. Depending on the size of the estate, carrying out these obligations could generate a significant amount of paperwork. Many of these records could be relevant to future claims from the IRS or from heirs or creditors challenging the distribution of assets or administration of the estate.

Any claim that a potential plaintiff can bring against an estate is limited by a legal rule known as the statute of limitations, which establishes a time limit for filing a lawsuit. Although statutes of limitations vary by state, generally, they are fairly short with regard to estates to encourage respect for the deceased person's wishes and support finality when an estate is closed.

For instance, states generally give creditors only one or two years from the date of death or date of notice to file a claim. The same is true for disgruntled heirs who may want to challenge the will or distributions made under it. But claimants can sometimes succeed in convincing a court to allow claims outside the limitations period, so it's best to keep the records just in case.

Then there's the potential for an IRS audit. While these are infrequent, they are not unheard of. As executor, you may have had to file several kinds of tax returns, including the testator's final income tax, any income tax owed by the estate itself, and estate or gift taxes if required. The IRS generally has three years to audit a return, but in certain circumstances, that time period is extended to six years.

The Bottom Line

Ultimately, experts recommend keeping most estate papers for seven to 10 years, just to be safe. Specifically, the recommendations break out this way:

  1. Keep tax returns and supporting documents, records of property or investment sales, appraisals, and the estate's bank statements and accounting records including payment to creditors for at least seven years.
  2. Keep records of any trusts established with estate assets until at least 10 years after the youngest beneficiary becomes eligible to take their full share.
  3. Keep the deceased person's death certificate, ongoing trust documents, the original will, and letters testamentary issued by the court indefinitely.

That's potentially a lot of paper for a larger estate. If you don't have room for all of it, consider keeping only originals, such as a signed will or certified copy of a death certificate, and scanning the rest. Keep a copy on an external hard drive or disk and back it up to the cloud as well. Check with your service provider to be sure that your data will be encrypted.

When you are ready to get rid of documents, be sure to shred them because many estate records contain significant personal information. Before you take that step, consult with an estate planning attorney—particularly if there's an attorney who worked with you on settling the estate—for advice on your particular situation.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.