Arizona Trusts & Trust Administration FAQ (2025)

Think of a trust as your own private "safety deposit box" for your life. You get to put your home, money, and belongings inside. While you're alive, you're the only one with the key. When you pass away, the person you chose (your trustee) gets the key and gives everything to your family, following your instructions — no waiting, no courthouse.

The big benefit: Your family gets your belongings right away instead of waiting months or years in probate court.

A Will is like leaving a note that says “give my house to my kids”

• But your family must go to court to prove the note is real
• Takes 9-12 months in Arizona probate court
• Costs thousands in attorney fees and court fees
• Everything becomes public record

A Trust is like handing over the keys to someone you trust with instructions.

• They give everything to your family quickly
• No court needed
• Stays private
• Much faster and cheaper

Bottom line: Both work, but a Trust skips the courthouse hassle.

Yes, you should have a Will even with a Trust. This companion Will (called a "Pour-Over Will") serves as your safety net, catching any assets you forgot to transfer into your trust or acquired after creating it.

Even the most diligent person may forget to transfer every single asset into their trust. Common overlooked items include:

• House purchased after the trust was created
• House that was refinanced after the trust was created
• Bank accounts opened after creating the trust
• Vehicles and personal property
• Life insurance or retirement accounts with outdated beneficiaries
• Unexpected inheritances or lawsuit settlements
• Business interests acquired later

Your Pour-Over Will directs these "orphaned" assets into your trust after death, ensuring they're distributed according to your trust's instructions rather than Arizona's intestacy law (think direct blood relatives).

Beyond the pour-over function, your Will handles matters a trust typically does not:

• Names guardians for minor children
• Directs final arrangements and burial wishes
• Appoints a Personal Representative to wrap up final affairs in probate court
• Revokes prior Wills to avoid confusion

A Power of Attorney (POA) gives someone authority to make financial or health decisions for you while you are alive and able to make decisions. It only works for assets in your “individual” name and ends when you pass away.

A Trust is a legal "container" that holds your assets. It works both during your life (if you become unable to manage your affairs) and after you pass away. It's what ensures your assets are distributed without the need for court.

Power of Attorney	Trust
Works only during your lifetime	Continues after death
Controls individually-owned assets	Controls only trust-owned assets
No asset transfer needed	Requires retitling assets into trust
Free to revoke while competent	Can be revocable or irrevocable
Simple, lower cost	More complex, higher initial cost
No probate avoidance	Avoids probate for trust assets

Most comprehensive estate plans include both documents because they serve different purposes:

• Your POA handles individual assets and personal decisions if you become incapacitated
• Your Trust manages trust assets and distributes them after death without probate

Upfront costs:

• Simple will: $800-$1,500
• Living trust: $2,000-$4,000

But here's what probate costs your family:

• Court fees: $300-$500
• Attorney fees: $3,000-$6,000+ (simple cases), $10,000-$20,000+ (complex cases)
• Time: 6-18 months typically

Think of a trust like car insurance - you pay more now to save your family much more later.

Arizona makes the decisions for you - not your family.

• If you're married with kids from this marriage: the Spouse gets everything.
• If you have kids from a previous marriage: the Spouse and kids must share everything (this creates problems).
• If you're single with kids: Kids split everything equally.

What gets nothing: Friends, stepchildren, charities, your church.

Real story: Bob wanted to leave $10,000 to his stepson, who took care of him for years. No will/trust = stepson got $0, everything went to Bob's biological kids, who hadn't visited in years.

Yes! You stay completely in charge while you're alive.

Here's how it works:

• While you're healthy: You manage everything yourself (you're the "trustee")
• If you get sick: The person you chose takes over smoothly making decisions in your best interest.
• When you pass away: They make decisions in the best interest of the trust beneficiaries.

It's like having a backup driver - you drive your own car, but someone you trust can take the wheel when needed.

PUT THESE IN YOUR TRUST:

• Your house and any rental properties
• Bank accounts and savings
• Investment accounts
• Cars, boats, RVs
• Family business
• Valuable personal items
• Life insurance policies

DON'T PUT THESE IN:

• 401k and IRA account or any tax deferred account. You have not paid taxes on this money, so if the trust is the beneficiary, the trust will pay income taxes at a much higher rate.

Most important: Your house! In Arizona, any real estate over $300,000 must go through probate court if it's not in a trust.

This person will handle your family's finances, so choose carefully.

Good choices:

• Responsible adult child who's good with money
• Trusted sibling
• Close family friend
• Professional trustee like a bank or trust company, but this can be expensive.

Red flags:

• Someone with money problems
• Family members who don't get along
• Someone who lives far away (unless necessary)

Smart tip: Name 2-3 backups in case your first choice can't serve.

A regular living trust does not. It is designed to help you avoid court and distribute your assets to your family. To protect your assets from nursing home costs, you need a different, more complex type of trust that requires giving up control of your assets permanently. For most people, a better solution is to get long-term care insurance while you are healthy.

For nursing home protection, you need:

• Special irrevocable trust (you give up control permanently)
• Must be done 5+ years before needing care
• Complex rules - requires specialized attorney

Better approach for most people: Long-term care insurance while you're healthy.

Your trust moves with you and stays valid.

But you might need updates for:

• Different tax rules in your new state
• New local successor trustee
• State-specific legal requirements

Simple solution: Have an attorney in your new state review your trust within the first year.

Yes - a short "pour-over will" that:

• Names guardians for minor children (trusts can't do this)
• Catches anything you forgot to put in the trust
• Says "anything I missed goes to my trust"

Much faster than probate:

• Trust: 3-6 months typically
• Probate: 9-12+ months

Timeline:

1. Week 1: Successor trustee takes control
2. Month 1-3: Pay final bills, gather assets
3. Month 3-6: File taxes, distribute to family

You likely need a trust if:

• You own a house in Arizona
• You want privacy for your family
• You have minor children
• You own a business
• You want to avoid courthouse delays
• Own property in a different state
• Beneficiaries with special needs, mental health or addiction problems

A simple will might work if:

• You have very few assets
• Everything already has named beneficiaries that are adults
• You don't mind your affairs being public

The person who created the trust (the "trustor") is typically the first trustee. If they are no longer able to serve, the "successor trustee" they named takes over. Courts can step in if there is a vacancy in trusteeship, which means that there isn’t a person able to handle the job that is named in the document.

Yes, but only if all assets are properly titled in the name of the Trust. If any assets do not show the Trust or Trustee as the owner, and they do not have a designated beneficiary, then these assets will go through probate. The goal is to get everything you own into the name of the Trust, which is called “funding” the Trust. As an example, there must be a deed transferring the real property (your home) into the trust unless it was purchased in the name of the Trust. The same is true with all assets, such as bank accounts, vehicles, life insurance, etc. Over 50% of the probates in my office involve a Trust that was not funded properly, which costs the family more than $6,000 after you pass away to go through probate.

Trustees must notify beneficiaries in writing that the trust exists, who the trustee is, and how to request more information.

Usually within one year of death, or four months after formal notice.

They are a fiduciary. Act in good faith, keep records, manage carefully, and treat beneficiaries fairly. Failing these duties = personal liability.

Yes, if the trust allows. The sale must benefit beneficiaries and be documented.

Yes. Beneficiaries have the right to know assets, income, expenses, and distributions.

Simple: 3–12 months

Complex: years (especially with real estate, taxes, or disputes)

Trustees must pay debts, funeral costs, and taxes before distributing assets.

Beneficiaries can remove them, force an accounting, or sue for damages.

Sometimes, by the creator (while alive), unanimous consent, or court approval.

Follow the trust, keep records, send notices, and get written releases or court approval.

The trustee must locate the trust, confirm authority, notify beneficiaries, and secure property. That’s the official start.

Document recorded to establish successor trustee's authority after original trustee's death or incapacity.

Key Components:

• Affidavit by successor trustee accepting appointment
• Death certificate of original trustee
• Relevant trust provisions showing succession authority
• Legal description of trust property
• Notarized and recorded in county where property located

Purpose: Creates public record of trustee authority for property transactions without revealing full trust terms.

By presenting a death certificate and trust documents to the bank, such as the successor trustee notice.

By signing a deed as trustee and recording it. If property wasn’t in the trust, probate may be needed.

Yes, usually after death. The trustee uses it to open bank accounts in the name of the trust and tax returns.The trustor’s social security number will not work after death.

Yes — detailed reports of assets, income, expenses, and distributions are required.

The trustee must follow instructions, consider written memorandums, and keep records. Clear documentation prevents family fights.

Trustor: Creates the trust and puts assets in. This is the same as Creator, Settlor or Grantor.

Trustee: Manages the assets.

Yes — if allowed by the trust and done for beneficiaries’ benefit.

The remaining trustee records a Sole Trustee Notice so banks and records show full authority.