Declaration of Appointment of Successor Trustee Where Agreement
What is the Declaration of Appointment of Successor Trustee?
When the person who is the trustee does not qualify to be a trustee or if the trustee is not able to serve or if the trustee resigns from being a trustee or even if the trustee is not designated in the trust deed, it is up to the beneficiary to create a Declaration of Appointment of Successor Trustee Where Agreement is made and the person is appointed in place of a trustee and is appointed as a substitute trustee.
There is another reason – that is when the beneficiary decides that he wants to remove the trustee. In such a case he may have the Declaration of Appointment of Successor Trustee Where Agreement is drawn with the substitute trustee and this is called a trustee substitution.
When there is any kind of substitution of trustees, the county recorder of the county where the trust property is located needs to record the substitution of the trustees made and this information is to be given by certified mail or registered mail and this has to be given with the postage which is prepaid. This notice has to be given to the trustor.
When there is a substitution notice, the qualifications of the substitute trustee needs to be given as per section 33-803 under the subsection A.
It is only when all these conditions are fulfilled can it be considered that there has been a substitution of trustees which has been made and that it is legal as well as binding on all the parties going forward.
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This trust agreement, dated _________, is to certify that _________[a banking corporation organized under the laws of the United States], as trustee under this agreement, is about to take title to the following described real estate in the County of _________, State of _________: _________[legal description], and that when trustee has taken the title to it, or to any of the real estate deeded to it as trustee here, trustee will hold it for the uses and purposes and on the trusts set forth here.
1. Names, addresses, and interests of beneficiaries. The following named persons are the beneficiaries of this trust, and shall be entitled to the earnings, avails, and proceeds of the trust property according to the respective interests set forth here:
2. Interests of beneficiaries as personalty. The interests of the beneficiaries here shall consist solely of: (a) a power of direction to deal with title to the trust property, (b) a power to manage and control the property as provided here, and (c) the right to receive the proceeds from rentals and from mortgages, sales, or other disposition of the property. The right to the avails and proceeds of the property shall be deemed to be personal property and may be assigned and transferred as personal property.
In case of the death of any beneficiary during the existence of this trust, the beneficiary’s right and interest here shall, except as otherwise specifically provided here, pass to the beneficiary’s executor or administrator, and not to his or her heirs at law. No beneficiary now has or shall have any right, title, or interest in or to any proportion of any real estate, either legal or equitable, but only an interest in the earnings, avails and proceeds from it.
3. Effect of death of beneficiary. The death of any beneficiary shall not terminate the trust or in any manner affect the powers of trustee.
4. Assignment of beneficial interests. No assignment of any beneficial interest here shall be binding on trustee until the original or a duplicate of the assignment in a form satisfactory to trustee is delivered to trustee. Any assignment not so delivered to trustee shall be void as to all subsequent assignees or purchasers without notice.
5. Filing of income tax returns. Trustee shall not be obligated to file any income, profit or other tax reports or schedules; the beneficiaries shall individually make all such reports, and pay any and all taxes on the earnings, avails and proceeds of the trust property or growing out of their interest here.
6. Reimbursement and indemnification of trustee. If trustee makes any advances of money on account of this trust, is made a party to any litigation on account of holding title to the real estate or in connection with this trust, or is compelled to pay any sum of money on account of this trust, whether on account of breach of contract, injury to personal property, fines or penalties under any law or otherwise, the beneficiaries will on demand pay to trustee, with interest at the rate of _________ percent per year, all disbursements or advances or payments of this nature made by trustee, together with trustee’s expenses, including reasonable attorneys’ fees. Trustee shall not be called on to convey or otherwise deal with the trust property at any time held here until all of these disbursements, payments, advances, and expenses made or incurred by trustee have been fully paid, together with interest. Trustee shall not be required to advance or to pay out any money on account of this trust or to prosecute or defend any legal proceeding involving this trust or any property or interest here unless trustee is furnished with sufficient funds or is satisfactorily indemnified.
7. Protection of third parties dealing with trustee. No party dealing with trustee in relation to the trust property in any manner whatsoever, and no party to whom the property or any part of it or interest in it is conveyed, contracted to be sold, leased, or mortgaged by trustee, shall be obliged to see to the application of the purchase money paid or to inquire into the necessity or expediency of any act of trustee or the provisions of this instrument.
8. Trust agreement not to be recorded. This agreement shall not be placed on record in the recorder’s office of the county in which the trust property is situated, or elsewhere. This type of recording shall not be considered notice of the rights of any person here derogatory to the title or powers of trustee.
9. Disclosure of names of beneficiaries. In the event of service of process on trustee at any time in the future, trustee may in its discretion disclose to the other parties to the proceeding the names and addresses of the beneficiary or beneficiaries.
10. Resignation of trustee. Trustee may resign at any time by sending a notice of its intention to do so by registered mail to each of the beneficiaries here at his or her address last known to trustee. This resignation shall become effective ten days after the mailing of the notices. In the event of this resignation, a successor or successors may be appointed by the person or persons then entitled to direct trustee in the disposition of the trust property, and trustee shall then convey the trust property to the successor or successors in trust. If no successor in trust is named within ten days after the mailing of the notices, trustee may convey the trust property to the beneficiaries in accordance with their respective interests here, or trustee may, at its option, file a bill for appropriate relief in any court of competent jurisdiction. Notwithstanding this resignation, trustee shall continue to have a first lien on the trust property for its costs, expenses, and attorneys’ fees, and for its reasonable compensation. Every successor or successors in trust shall become fully vested with all the estate, properties, rights, powers, trusts, duties and obligations of its, his, her, or their predecessor.
11. Duties of trustee. Trustee assumes and agrees to perform the following active and affirmative duties under this agreement:
(a). Execution of instruments. When and as directed to do so in writing by the following named person or persons: _________, trustee shall execute the instruments necessary to protect and conserve the trust property; to sell, contract to sell, and grant options to purchase the property and any right, title, or interest on any terms; to exchange the property or any part for any other real or personal property on any terms; to convey the property by deed or other conveyance to any grantee, with or without consideration; to mortgage, execute principal and interest notes, pledge or otherwise encumber the property or any part; to lease, contract to lease, grant options to lease and renew, extend, amend and otherwise modify leases on the property or any part, for any period of time, for any rental and on any other terms and conditions; and to release, convey or assign any other right, title or interest whatsoever in the property or any part. All trust deeds, mortgages, and notes executed by trustee shall contain provisions exempting and exonerating the beneficiaries under this trust from all personal obligation and liability whatsoever by reason of their execution and from any and all personal obligation or liability for the repayment of the borrowed money evidenced and secured by them. Trustee shall not be required to inquire into the authenticity, necessity, or propriety of any written direction delivered to it pursuant to this paragraph or otherwise here.
All trust deeds, mortgages and notes executed by trustee may contain provisions exempting and exonerating trustee from all personal obligation and liability whatsoever by reason of their execution, and shall contain provisions exempting and exonerating the beneficiary under this trust from all personal obligation and liability whatsoever by reason of their execution and from any and all personal obligation or liability for repayment of the borrowed money evidenced and secured by them.
(b). Sale of trust property and distribution of trust proceeds. If any property remains in trust here twenty years from the date here, trustee shall sell the same at public sale after a reasonable public advertisement and reasonable notice of the sale to the beneficiaries and, after deducting its reasonable fees and expenses, trustee shall divide the proceeds of this sale among the beneficiaries as their interests may then appear without any direction or consent whatsoever, or shall transfer, set over, convey, and deliver to all the then beneficiaries of this trust their respective undivided interest in any nondivisible assets, or shall transfer, set over, and deliver all of the assets of the trust to the beneficiaries in their respective proportionate interests at any time that the assets of the trust consist solely of cash.
12. Beneficiaries to manage and operate trust property. The beneficiaries shall, in their own right, have full and exclusive control over the management and operation of the trust property and control of the sale, rental, or other disposition. Each beneficiary, or his or her agent, shall collect and otherwise handle his or her share of the rents and avails and the proceeds of any sale or other disposition. Trustee shall have no duty respecting the payment of taxes, insurance premiums, or other costs or charges against or concerning the trust property.
13. Compensation of trustee. The beneficiaries shall pay trustee as its compensation the following:
(a). $_____ for accepting this trust, taking title to the trust property, and first annual fee.
(b). $_____ per year or any portion of it, for holding title to the trust property, so long as any property remains in trust here, commencing _________[date].
(c). Trustee’s regular schedule of fees for causing such deeds, mortgages, leases, and other instruments to be executed as may be required here.
(d). Reasonable compensation for any special services that may be rendered by trustee here, and for taking and holding title to any other property that may be conveyed to trustee in the future.
14. Successors bound. The terms and conditions of this agreement shall inure to the benefit of and be binding on any successor trustee here, and on all successors in interest of the beneficiaries.
Executed at _________[place] on _________[date].
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