A substitution of trustee is a legal document filed when it is necessary to change a trustee. Two common situations where such a document can come up can be seen in the real estate industry and in the management of private trusts. In real estate, a trustee is appointed by a lender so in the event that a property needs to be foreclosed, the trustee can take charge of arranging the sale and forwarding the proceeds to the lender. With private trusts, trustees are appointed to manage the assets in the trust and distribute them as directed under the terms of the trust.
In many cases, when a trustee is appointed, a secondary trustee is named in the documents filed at the time. This person is named to take over in the event that the original trustee becomes unable or unwilling to do the job. If the secondary trustee needs to step up to assume duties, a substitution of trustee will be filed to formalize the change. Beneficiaries can also appoint an entirely new trustee to take over.
This document must be filled out completely and submitted to the clerk or recorder in the region where the original legal documents are filed. In the United States, for example, the county clerk in the county where the deed of trust and other matters relating to a real estate sale were filed would need to receive the substitution of trustee document. Notices must also be sent to people with an interest in the trust, such as a landlord's tenants.
Blank forms that people can fill out are sometimes available from government offices and they can also be found in books of legal forms. A lawyer can also draw up a substitution of trustee for people who need one. It is important to use a document that has been prepared or reviewed and approved by an attorney to confirm that all of the necessary information is present. If there are errors in the document, they can be used to challenge the validity of the document and may create problems in the future. People who are in doubt should consult an attorney to confirm that the form is correctly filled out.
The information on such documents enters the public record and anyone may look it up. People who are acting as trustees should be aware that they can be relieved of their positions if the beneficiary or a concerned party suspects that the trustee is not representing the beneficiary's best interests.