Introduction

One of the most overlooked areas in private trust administration is proper recordkeeping. Trustees are fiduciaries—not casual managers—and as such, they are legally required to document key decisions, maintain transparency in administration, and demonstrate the rationale behind major actions affecting the trust corpus and its beneficiaries.

In the context of non-statutory or contract-based irrevocable trusts, where court supervision is minimal or non-existent, internal governance records become the trustee’s primary defense against allegations of impropriety, mismanagement, or tax misclassification.

This article provides a comprehensive breakdown of the types of trustee recordkeeping tools—trust minutes, board resolutions, and standing resolutions—explains how they differ, when each is necessary, and how to use them efficiently without overburdening the administrative process. Legal citations and fiduciary precedents are included to reinforce these practices as part of a prudent trustee’s standard of care.

The Fiduciary Duty to Record Decisions

Under both the Restatement (Third) of Trusts §83 and the Uniform Trust Code §810, trustees have a duty to keep records of the administration of the trust and to make them available for inspection by beneficiaries. This includes documenting:

• Disbursements

• Major decisions (e.g., acquisitions, distributions)

• Changes in investment strategy

• Acceptance or resignation of fiduciaries

• Tax-related elections

Failure to document actions may result in:

• Breach of fiduciary duty claims (if losses occur or beneficiaries challenge discretionary acts)

• IRS recharacterization of trust expenses or operations (e.g., IRC §642(c)(2), §212, §263)

• Loss of credibility in a future audit or court inquiry

For non-statutory trusts, internal documentation becomes the functional equivalent of judicial oversight, and resolutions serve as fiduciary “receipts” of proper administration.

Definitions: Minutes vs. Resolutions

Trust Minutes

Minutes are narrative summaries of meetings, decisions, and deliberations by trustees. They are typically used to:

• Summarize what was discussed and considered

• Document who was present and what was decided

• Show diligence and reasoning behind decisions

Format:

• Date and time of meeting

• Trustee(s) present

• Topics discussed

• Actions taken or deferred

• Signature of trustee or chair

Minutes are more contextual and are especially useful when decisions are made collectively or over several stages. They provide a fiduciary rationale, which may not always be obvious in a resolution alone.

Board Resolutions

A board resolution is a formal decision document—often formatted as a one-page statement—memorializing a specific act or policy decision by the trustee. It is a declaration of:

• Intent

• Authority

• Execution of power

Use cases include:

• Authorizing a new bank account

• Approving a property transfer

• Appointing or removing officers or agents

• Making charitable set-asides under IRC §642(c)(2)

• Redeeming a capital interest certificate

Format:

• Title (e.g., "Resolution to Open Trust Account at XYZ Bank")

• Statement of authority

• Legal rationale or citation (if applicable)

• Statement of resolution (what is being done)

• Dated and signed by the acting trustee(s)

Resolutions are typically used at or after the time of decision, and they serve as proof of compliance and fiduciary authorization for third parties, such as banks, tax advisors, or auditors.

Standing Resolutions

A standing resolution is a general policy resolution that remains in effect until revoked or superseded. It provides clarity and authority for recurring or discretionary actions.

Examples include:

• Authorizing the trustee to approve expenses below a certain threshold

• Allowing trust income to be reinvested into specific categories

• Stating the method of calculating trustee compensation

• Declaring the scope of capital interest issuance for internal use

Standing resolutions prevent the need for recurring resolutions on the same subject, thereby reducing administrative burden while maintaining documented policy.

Format is similar to standard resolutions but typically includes a clause such as:

“This resolution shall remain in effect until amended or revoked in writing by the trustee.”

Do Trustees Need All Three?

Yes—but not all the time.

The most efficient trustees use a layered approach:

• Use trust minutes to document meetings and collective deliberations

• Use resolutions for discrete decisions, actions, or transactions

• Use standing resolutions to document and delegate ongoing authority or trustee policy

You do not need a resolution and minutes for the same decision unless:

• The minutes reflect a discussion, and the resolution executes the result

• The action has both a procedural context (minutes) and a third-party interface need (resolution)

Avoid over-documenting, but never skip resolutions for decisions that:

• Affect trust assets materially

• Alter tax position or create exposure

• Appoint or remove a fiduciary

• Require third-party cooperation (banks, brokers, CPAs)

Legal Authority for Recordkeeping Practices

• Restatement (Third) of Trusts §83: Trustees must keep and render accounts and keep beneficiaries reasonably informed

• Uniform Trust Code §810: Duty to keep adequate records of administration and respond to reasonable requests

• Treasury Reg. §1.642(c)-2(d): Requires evidence of permanent set-aside (resolutions or minutes may serve this purpose)

• PLR 9012007: IRS acknowledged proper trustee resolutions as evidence of intent in charitable deduction context

• IRS Publication 559: Fiduciaries must document income, deductions, and elections for trust tax reporting

Failing to document key decisions—especially those involving tax elections, set-asides, or compensation—could be interpreted by the IRS or a court as unauthorized self-dealing or breach of trust.

Practical Recommendations

• Maintain a trust minute book or digital equivalent (organized by year)

• Use numbered resolutions with short, descriptive titles

• Review and update standing resolutions annually

• Store IRS filings, bank agreements, and asset ledgers alongside resolutions for cohesion

• Train successor trustees in the recordkeeping logic and protocols

Conclusion: Recordkeeping Is Governance, Not Bureaucracy

For a private trustee, documentation is due diligence. It is not merely red tape—it is the practical method of demonstrating legal compliance, tax intent, beneficiary stewardship, and internal discipline. Minutes tell the story; resolutions show the action.

When done correctly, trust recordkeeping doesn’t need to be excessive or paralyzing. It simply needs to be consistent, logical, and defensible. Trustees who understand this framework protect not only the trust—but their own liability and reputation.

Sources

• Restatement (Third) of Trusts §83: Fiduciary duty to maintain and render accounts.

• Uniform Trust Code §810: Duty to keep and disclose adequate records.

• Treasury Regulation §1.642(c)-2(d): Charitable set-aside requirements.

• IRS Private Letter Ruling 9012007: Recognizing trustee resolutions as evidence of charitable intent.

• IRS Publication 559: Guidelines for fiduciary accounting and tax responsibilities.

• IRS Form 1041 Instructions: Fiduciary income tax return guidance.

• National Association of State Boards of Accountancy (NASBA) - Recordkeeping Guidance: For fiduciary and tax documentation standards.