Once an estate is settled and distributions made by the executor or administrator to heirs and beneficiaries, what's left is a lot of paperwork. How long to keep the paperwork depends on several factors, including the ability of the executor to store it. The length of time an heir keeps the paperwork also depends on what is done with the proceeds. Keep an actual estate tax return indefinitely.
Keep the records and papers for any settled estate for at least seven years, if an estate tax return was filed. That is the Internal Revenue Service recommendation for any financial transactions. Under IRS rules, that is the end of the statute of limitations for any kind of auditing. This would be true for both estate and inheritance paperwork. When destroying this paperwork, make sure it is shredded or otherwise completely destroyed, as it contains a great deal of personal information.
Those married when receiving inheritances through estate settlements may want to keep the paperwork concerning distributions "until death we do part." Inheritances are not considered community property in the states operating under those laws and not as part of equitable distribution laws in other states. This all depends on whether or not the inheritance was commingled, meaning that either inherited money becomes part of a joint account or jointly-held funds are deposited into an inheritance account. If commingled, funds are no longer considered inheritance in case of divorce. However, if the inherited funds remain separate, the other spouse is not entitled to them. It can't hurt to keep all related paperwork to prove the inheritance of certain funds or property.
Although most states require any parties contesting a will to do so within a limited time frame, it's always possible that litigation could occur after the estate is settled. If the personal representative knew the decedent well and really doesn't think there will be any surprises, then getting rid of estate papers after seven years is likely fine. However, in situations where there is a possibility that the estate could have claims made against it from the decedent's relatives after settlement, keep the paperwork. This would usually mean children from a long-ago marriage or relationship learning of the decedent's death long after the fact.
Each estate is different, and consultation with an estate attorney, especially the person who handled the actual estate work, can determine whether it's time to start shredding the settled estate paperwork or hang on to it. The attorney can also advise the executor, or the beneficiaries, how much longer the paperwork should be kept in the particular situation before discarding. While storing large amounts of paperwork may be a hassle, it's better to be safe than sorry.