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A fiduciary has the responsibility to manage the assets and interests of beneficiaries, which requires a high degree of accountability and transparency. Updating records regularly serves multiple important purposes, making the option encompassing both compliance and communication the best choice.

One key reason for regular record updates is to comply with tax regulations. Accurate and current records are essential for proper tax reporting, ensuring that all income, expenses, and transactions are documented according to the law. This not only helps the fiduciary remain in good standing with tax authorities but also protects the beneficiaries from potential tax issues that could arise from mismanagement or inaccuracies.

In addition to tax compliance, maintaining transparent communication with beneficiaries is crucial. Regular updates assure beneficiaries that their interests are being properly managed and allow them to stay informed about the status of their assets. This transparency fosters trust and confidence in the fiduciary, ultimately benefiting all parties involved.

Combining these two aspects—compliance with legal obligations and fostering clear communication—illustrates why a fiduciary must prioritize regular updates to records.