Trusts and Transfer-on-Death Deeds—Which Is Right for You?
When a loved one passes away in Arizona, one of the first legal processes families face is probate—the court-supervised transfer of property. Unfortunately, probate can be time-consuming, expensive, and public. For families looking to simplify estate planning and reduce stress for their heirs, two tools stand out: Revocable Living Trusts and Transfer-on-Death (TOD) Deeds.
Both are powerful probate-avoidance strategies, but each has its own strengths and limitations. Understanding how they work can help you choose the best fit for your situation.
Option 1: Revocable Living Trust
A revocable living trust is a legal document that allows you to transfer ownership of your assets—like your home, bank accounts, or investments—into a trust while you’re alive. You retain full control, and after you pass away, the trust directs how your assets are distributed without going through probate.
Benefits of a Living Trust:
- Avoids probate for all assets placed in the trust
- Ensures privacy (unlike a will, which becomes public record)
- Provides for incapacity planning—a successor trustee can manage your affairs if you’re unable to
- Offers flexibility for blended families, minor children, or special-needs planning
Potential Drawbacks:
- Higher upfront cost to create with an attorney
- You must “fund the trust”—this means retitling your home and other assets into the trust’s name
- Requires updates as you buy or sell property
While it takes more work up front, a trust offers comprehensive and long-term control over how your estate is managed and distributed.
Option 2: Transfer-on-Death (TOD) Deed
Also known as a Beneficiary Deed in Arizona, a TOD deed is a simple, inexpensive way to pass your home to a chosen beneficiary without probate. It allows you to name who should receive the property upon your death, while you retain full ownership during your lifetime.
Benefits of a TOD Deed:
- Fast, affordable, and easy to set up—just one document recorded with the county
- Avoids probate for the property it names
- You keep full control—can sell, refinance, or revoke the deed anytime
- No annual maintenance or trust funding required
Potential Drawbacks:
- Only applies to the specific property named—other assets may still go through probate
- No advanced planning—you can’t stagger distributions or protect heirs from creditors
- Heirs receive the home outright—no way to hold it “in trust” for minors or vulnerable individuals
- If the homeowner has a mental health issue during their lifetime–The property cannot be sold without the Power of Attorney in place to move them to a memory care type community. Otherwise a conservatorship/guardianship is required. (this is done in the probate courts)
TOD deeds work well for simple estates—especially when a single Arizona property is the main asset—but they may not be sufficient for more complex family or financial situations.
Choosing the Right Option
| If you… | Then Consider… |
|---|---|
| Own multiple assets, want long-term planning, or have unique family needs | Revocable Living Trust |
| Have one Arizona home and want a quick probate-free transfer | Transfer-on-Death Deed |
Some Arizona residents even use both: placing most assets in a trust while using TOD deeds for specific properties.
Real-Life Guidance in Plain Language
As a Certified Probate and Senior Real Estate Specialist, I’ve helped dozens of Arizona families navigate these decisions. In my book, Solving Life’s Next Chapter, I share real stories, planning tips, and straightforward advice to help you prepare now—so your family isn’t overwhelmed later.
You can find the book on Amazon in paperback, Kindle, or Audible versions.
Disclaimer: I am not an attorney. This information is for educational purposes only and should not be considered legal and Tax advice. Please consult with a qualified Arizona estate-planning and Tax attorney before making any legal decisions. If you need a referral to a trusted attorney, feel free to reach out—I’m happy to connect you.
Let’s Talk
If you have questions about how to avoid probate, how to fund your trust, or how to prepare your property for future generations, I’m here to help. Let’s make sure your next chapter—and your family’s—is secure, smooth, and well-planned.
Contact Lydia Wietsma 602.363.1720
Certified Probate & Senior Real Estate Specialist
Author of Solving Life’s Next Chapter
NextHome Power Realty: email at Lydia@ArizonaPowerAgent.com
Order my Book, Solving Life’s Next Chapter on Amazon:
