Fungus growing on the trunk or branches of a living tree is usually a sign of fatal disease. Seeing fungus on a dead tree stump is a healthy indication of a natural decay process. Along with insects and bacteria, fungus helps break down dead wood and returns its nutrients to the soil. Don't be in a hurry to replant on the same spot, though. Some types of fungi will infect the roots of whatever you plant with hardy spores for several years after the stump is gone.
Trametes versicolor is commonly called "turkey tail fungus" because of its brown and tan-colored, fan-shaped growth pattern that resembles a turkey's tail. According to the University of California Davis, this fungus can invade a great number of deciduous and evergreen stumps, and can even kill living trees when they pierce bark and reach the cambium layer. Appearing in groups and measuring 1 to 4 inches across, this fungus can quickly reduce a stump to deep, rich soil.
Heterobasidion annosum attacks evergreen stumps, though it can occasionally be found on deciduous and fruit trees as well. According to the University of North Carolina, it's a sneaky killer, and symptoms often don't appear until the tree is deeply affected. The first symptom is often the presence of small, tubular-shaped fruiting bodies that appear at the base of the trunk. Recommended treatments for killing this fungus include apply borate and urea to the stump.
Ganoderma lucidum, also called varnish fungus for the shiny, brown crust of its shelf-like form, attacks drought-stressed, deciduous trees like willow, hackberry, apple and redbud. Annual fruiting bodies can be up to 14 inches wide, according to the University of California Davis, making this a truly interesting and quick dissolver of tree stumps. It's an equal-opportunity eater, too, attacking both the roots and the body of tree stumps.
Stereum sp., known as "parchment fungus" for its papery, thin skin is most often found on dead branches stumps of dead deciduous trees like magnolia, tulip, catalpa and elm. It is rarely active enough to kill a living tree. Fruiting bodies appear in clusters and are only about an inch across, with a gray-brown surface and a brown underside. According to the University of California Davis, some species of this fungus ooze a red fluid when pierced.