# Trust Account Record Keeping: What to Keep and How Long

- Author: PreciseBankFlow (https://precisebankflow.com)
- Published: 2026-10-17
- Category: Trust and escrow reconciliations
- Canonical: https://precisebankflow.com/blog/trust-account-record-keeping

> Trust account record keeping requirements: journals, ledgers, statements, reconciliations and check images, plus retention periods and formats.
Trust account record keeping means holding a complete paper trail for every dollar held for others: an account journal, a ledger for each client or beneficiary, bank statements, check images, and a written monthly reconciliation. Retention follows your licensing rule; California's lawyer rule counts it from when money is paid out.

## Which records does trust account record keeping require?

Trust account record keeping requires two kinds of records. The account holder creates some: an account journal for each trust bank account, a ledger for each client or beneficiary, and a written record of each month's reconciliation. The bank creates the rest: statements and images of paid checks. Together they let anyone trace a dollar from receipt to payment.

The [State Bar of California's 2023 Handbook on Client Trust Accounting](https://www.calbar.ca.gov/Portals/0/documents/ethics/Publications/2023_CTA_Handbook.pdf) gives a clear list as the minimum under California's rule 1.15:

- **Client ledger.** One for each client, detailing every transaction for that client and showing the balance after each one.
- **Account journal.** One for each client trust bank account, recording money in and out of that account.
- **Bank statements and cancelled checks,** or check images, for every trust account.
- **Monthly reconciliation.** A written record that each month the journal was balanced against the client ledgers and the bank records.
- **Journal of other properties.** A record of securities or other property held in trust: what it is, whose it is, and when it came in and went out.

The handbook also recommends keeping deposit slips and checkbook stubs even though the rule does not require them, because they complete the audit trail.

Lawyers are not the only ones with this duty. Real estate brokers, insurance agencies holding premiums, title agents and benefit payees all keep a version of the same set. An agency's premium account, for example, needs a ledger by policy or carrier behind the bank balance; [premium trust account reconciliation for insurance agencies](/blog/premium-trust-account-reconciliation) shows how that set is used.

### A retention checklist

The table below is an example checklist. The retention triggers are examples based on California's rule for lawyers; your rule may differ.

| Record | What it shows | Created by | Example retention trigger |
| --- | --- | --- | --- |
| Account journal | Every receipt and payment through one trust account, with running balance | Account holder | Five years after the funds it records are paid out |
| Client or beneficiary ledger | One person's money: each receipt, payment and balance | Account holder | Five years after that person's funds are paid out |
| Monthly reconciliation | Bank, journal and ledgers agreed at a date, with sign-off | Account holder | Five years after the period's funds are paid out |
| Bank statements | The bank's record of the account each month | Bank | Five years after the funds on them are paid out |
| Paid check images or substitute checks | Payee, amount, endorsement and date of each check | Bank | Same as statements |
| Deposit slips and stubs | Detail behind each deposit and check | Account holder | Keep with the month they belong to |
| Other properties journal | Securities or items held, from receipt to release | Account holder | Five years after the property is released |

## What each trust account journal and ledger line must show

Each trust account journal and ledger line must show enough to identify the transaction without looking elsewhere: the date, the amount to the cent, the payer or payee, the reference, and the running balance after the entry. A ledger line also names the client or matter, and a payment line should say what the payment was for.

The California handbook describes the client ledger entries: for each receipt, the date, amount and source; for each payment, the date, amount, payee and purpose, followed by the new balance. It also says to record figures to the penny and never round, to post deposits and payments within 24 hours, and to record each check separately when several are deposited on one slip.

Broker rules can be even more specific about columns. The [California Department of Real Estate's guide to common audit violations](https://www.dre.ca.gov/files/pdf/commonviolationsfoundinaudits.pdf) says a broker's record of all trust funds must show, in columns and in date order, the date received, the payer or payee, the amount received, the date of deposit, the amount paid out, the check number and date, and a daily running balance. It notes that brokers are cited when a column is missing, when an entry has the wrong amount or date, and when the running balance is missing or wrong.

### What a complete entry looks like

An example ledger line for a fictional client:

- Date: 2026-05-11
- Description: Payment to county recorder, deed recording, Patel matter
- Reference: Trust check 2214
- Payment: 148.00
- Balance after: 3,602.00

Anyone reading that line can find the check image, the payee and the reason without asking the bookkeeper. That is the standard to aim for.

## Bank-created trust records: statements, check images and substitute checks

Bank-created trust records are the monthly statements and the images of paid checks for every trust account. They are the outside evidence that the journal and ledgers are true. Keep your own copies. Do not rely on the bank to produce them years later, because banks merge, change systems and limit how far back online history goes.

The California handbook makes this point directly. It warns that if a bank fails, merges or is taken over, copies of old cancelled checks may not be available, and it treats failing to keep bank records as a violation of the rule. Where the bank no longer returns paper checks, ask for check images or other statement records you can store.

Paid checks now usually come back as images or as substitute checks. The [Federal Reserve's answers on Check 21](https://www.federalreserve.gov/paymentsystems/regcc-faq-check21.htm) describe a substitute check as a paper copy of the front and back of the original check. They say it is legally the same as the original if it accurately represents the original's information and carries the legend that it is a legal copy of the check.

What to collect each month, for each trust account:

1. The full statement, every page, including pages the bank marks as intentionally blank.
2. Images of the front and back of every paid check.
3. Detail for each electronic credit and debit, such as wire confirmations and ACH addenda, when the statement's description is too short to identify the party.
4. Any bank notices: returned items, holds, fee changes or overdraft notices.

Store them by account and month, in the same place as that month's reconciliation.

## How long must trust account records be kept?

Trust account records must be kept for the period set by the rule that governs the account. In California, rule 1.15(d)(5) requires lawyers to keep trust records for five years after the money they refer to is paid out. Other states and other licences use different periods and different starting points, so check your own rule.

The starting point matters as much as the length. "Five years after disbursement" is not "five years after the statement date." Money that sat in trust for three years before it was paid out keeps its records alive for eight years from the first deposit. The California handbook recommends a simpler, safer practice: keep all of a client's trust records for at least five years after the client's matter closes. It adds that records relating to a matter under disciplinary investigation must be kept until the investigation ends.

Other kinds of trust money follow their own regimes. A representative payee managing someone's benefits keeps records to answer the agency that appointed them; [representative payee accounting for benefits](/blog/representative-payee-accounting) covers what that agency asks to see. Where several rules apply to one account, keep records for the longest period any of them requires.

## Keeping trust account records electronically without losing them

Trust account records can be kept electronically, but electronic records fail in ways paper does not: a lost backup, a software change that cannot open old files, a vendor that closes. Keep the data backed up, keep dated printouts or exports of the required records, and test that you can still read old years.

The California handbook accepts computerized systems and notes their advantages over manual entries. It also advises generating and keeping hard copies of the required records, dating and signing printouts to show who produced them and when, and backing data up regularly. It warns that changing software, operating systems or hardware can leave old data unreadable, and that computer records offered as evidence must be authenticated as business records.

A workable routine for an electronic system:

- **Each month,** export the journal, the ledger listing and the reconciliation report to a fixed format such as PDF, and save them with the bank statement for that month.
- **Each quarter,** confirm the backup can be restored by opening an old month from it.
- **Before changing software,** export every open and closed year to a format that does not depend on the old system, and keep those files for the full retention period.
- **When staff leave,** make sure no records live only on their computer or in their personal email.

## Rebuilding trust account records after months with no bookkeeping

Rebuilding trust account records after a gap means reconstructing the journal and ledgers from bank statements, check images and client files, month by month, until the books reach a balance you can prove. Do not start reconciling from today's bank balance and assume the past was right. Start from the last balance you can show was correct.

Gaps happen when a bookkeeper leaves, when a practice grows faster than its systems, or when a solo practitioner falls behind during a long trial. The California handbook advises that you cannot reconcile a month until the prior month's balances are correct, and that bringing in a bookkeeper to straighten out the records may be the right first step.

### Steps to rebuild

1. **Find the last good month.** This is the most recent month with a signed reconciliation where bank, journal and ledgers agreed.
2. **Gather the bank records** for every month since, including check images and deposit detail.
3. **Rebuild the journal** from the statements, adding deposits in transit and outstanding checks at each month end.
4. **Assign every line to a client** using client files, settlement statements, invoices and correspondence. Lines nobody can assign go on a list for research, not into a guess.
5. **Reconcile each month in order,** signing and dating each one as of the day it was actually done, not the month it covers.
6. **Correct any shortfall** found along the way from firm funds, and document it.

If there is no good month at all, as with an account that was never reconciled, you need a proven opening balance before step 3. [How to set the opening balance for a first bank reconciliation](/blog/first-bank-reconciliation-opening-balance) explains choosing the starting statement and proving the figure to a reviewer.

Reconstruction work is mostly reading statements. PreciseBankFlow reads digital and scanned trust statements line by line, proves each one foots from opening to closing balance, flags gaps in check sequences and possible duplicates, and gives each extracted field a confidence score so you know which lines to check against the PDF first. Assigning lines to clients stays with you. [Request early access](/get-started) if you have a backlog to rebuild.