Understanding Probate vs Trust: Key Insights

Throughout my career, I’ve met countless clients who have said to me that they wanted a Trust (instead of a Will) to avoid probate. But I’ve learned that most people are all too eager to set up and pay for over-complicated and unnecessary Trusts to avoid something that they do not fully understand.

If you’re having concerns about probate and are considering a Trust instead of a Will, then I invite you to continue reading. In many (if not most) cases, Probate is not only easy and straight forward, but preferrable to Trust administration (in my experience).

Wills (probate) and Trusts are both a means to an end: you choose someone to administer your estate in order to pass down money and property to your heirs and loved ones in a particular way. The primary difference between these methods is how the process begins. The middle and end are substantially similar in almost every way that matters.

Key Differences: The Beginning

In Arizona, probate begins with the Probate Registrar in the County where the person has died. If there’s a Will, the person named as the Personal Representative files an Application for Appointment and provides the original Will to the Registrar. If there is no will, the Application is the same, only the Personal Representative is chosen by Arizona Law. Specifically, A.R.S. § 14-3203 sets forth the priority for appointment in a clear and concise manner.

The Application for Appointment in most cases is done “informally” and only in special circumstances is a hearing required. I’ll discuss the difference between formal and informal appointments in a separate blog.  In each case, however, Letters of Personal Representative are issued shortly after the Application is filed (usually within 3 business days). This document has the force and effect of a court order. Anyone who receives that document must cooperate with the Personal Representative in the administration of the estate and the performance of their duties.

On the other hand, a Trust appoints a Successor Trustee to administer your estate. A Successor Trustee can skip the entire Application process. Neither the Registrar nor the Court are involved. Instead, your Successor Trustee “accepts” their nomination by signing a legal document before a Notary, confirming that they accept the position and agree to carry out the terms of the Trust.

The most notable distinction here is that the Successor Trustee (who generally acts in the same manner as a Personal Representative) does not receive a court order. In fact, all required documents must be prepared without any of the helpful Court forms or instructions. Unfortunately, third parties are not legally bound by what is, in essence, only a private contract. In some cases, banks, financial institutions and other third parties refuse to cooperate unless the Successor Trustee obtains a court order (or a medallion guarantee). Even when this is not required, the Trust documents must be reviewed and approved by individual legal departments over and over, which can take considerably longer than reviewing and approving the more standardized Letters of Personal Representative.

In a nutshell, beginning administration with a Trust can cause significant delays and, in some cases, requires court involvement anyway.

Key Differences: The Middle and End

Whichever method is chosen, the next part of the process is generally known as “administration”. This is the same whether you are administering a Will through probate or administering a Trust privately. Administration can be more or less complicated depending on the nature and extent of the estate and assets (not by whether probate is required). Either way, administration generally follows the same process:

• Identifying and collecting assets;
• Making notifications (to heirs/beneficiaries and creditors);
• Paying debts and administration expenses (and preparing/filing tax returns);
• Liquidating assets (as needed);
• Preparing Inventories and Accountings; and
• Distributing and Closing the Estate.

Again, the administration process is virtually identical whether you’re administering an estate under a Will or a Trust. The biggest distinction is that in probate, the Court requires the Personal Representative to provide certain updates in writing. The Personal Representative accomplishes this by filing “proofs” with the Registrar. For example, the court wants to know that the Personal Representative has mailed notice/information to the beneficiaries and creditors, and that an initial inventory has been taken. At the end of the case, the Court wants a Closing Statement so that the “end” is official.

However, even when administering a Trust, it can be a good idea to perform these tasks and maintain relevant documents as proof, anyway. If someone comes around later questioning the process, there will be evidence that administration was done properly. The extra step of filing proofs with the Registrar costs nothing for the Personal Representative (more than postage maybe) and has the benefit of creating a third-party record.

In my personal experience, many people can probate a Will without much assistance; administering a Trust often requires guidance from an attorney.

All in all, however, the difference in administration is negligible.

Popular Misconceptions (FAQ’s)

All too often I encounter clients who are the proud owners of “fancy estate plan binders”. These binders contain, among other documents, their Living Trust, which in many cases is 30 or 40 pages. These trusts are often overly complex and provide solutions to issues that weren’t problematic in the first place.  Moreover, most people do not possess a full understanding of their Trust or how it works. In many cases, the client has never even transferred any property into the Trust, making it more or less useless.

When I ask clients why they chose (or want) a living Trust instead of a Will, they usually have the same common answers.

“I want to avoid probate.”

People have been conditioned to believe that having a Trust simplifies administration. I can tell you from personal experience, that it simply is not so. As explained above, probate is a simple and straight forward process that is substantially similar to administration of a Trust. In many ways, probate is an easier process because the Personal Representative has a court order that cannot be ignored/rejected and the Registrar (or Court) has established a step-by-step process to ensure that administration is done appropriately (leaving less room for second guessing later).

“I want to distribute to my child/grandchild through a special needs Trust.”

Special Needs (and all other manner of trusts) can also be set up in a Will. This is called a testamentary trust. In fact, virtually anything that you can do in a Trust can be done in a Will.

“A Trust is less expensive than probate.”

In my own experience, the opposite is actually true. For starters, you will have to transfer your property into the Trust after it is created, while you are still living. This creates more work and increases your costs. Income from these assets may be taxed at a higher rate due only to the fact that they are held in Trust. In fact, Trusts are considered separate from you and therefore often have to file their own tax returns. And in many cases, a Trust is irrevocable, which means you may be limited or prohibited from making changes after your spouse dies.

While preparing and probating a Will has its own complexities and nuances, having a Will prepared is almost always less expensive than a Trust. In my experience, the probate process is usually easier and less complicated, and the justifications for creating a Trust are usually not legitimate.

“A Trust is the only way to avoid probate.”

While it is not always possible to avoid probate entirely, depending on the nature of your assets, you can use beneficiary deeds and designations, pay-on-death designations and other, similar methods to ensure that all (or most) of your property passes without probate or trust administration of any kind.

“I want to avoid or reduce taxes.”

There are only two guarantees in life: death and taxes. If someone dies with a large enough estate, taxes will be paid. The uber-wealthy spend tens of thousands or hundreds of thousands of dollars on lawyers and accountants to avoid paying millions in estate, inheritance and generation-skipping taxes. The “average joe” simply cannot afford this level of tax planning or avoidance.

The good news is that most people don’t need it! For 2026, the federal estate tax exemption (lifetime exemption) is $15 million per individual ($30 million for married couples). That means your estate will not pay taxes unless the gross value exceeds $15M/$30M.

In Arizona, there is no estate tax regardless of the size of your estate. Arizona also does not impose an inheritance tax on your heirs or beneficiaries.

All of the “fancy estate plan binders” notwithstanding, if you’re reading this blog, you probably don’t need “tax planning” which means you probably don’t need the headache of a Trust either.

“I want my estate/family to avoid paying creditors.”

This is a really complicated topic. Suffice to say that if a creditor wants to be paid, they will find a way to get paid (or at least make things very difficult). A Trust document can technically prohibit the payment of debts. But again, this is a private document and third parties do not have to abide. While there are exceptions, in most cases, Successor Trustees will follow the same notification/claims process as if they were in probate. This ensures that the beneficiaries will not be bothered later and reduces the likelihood of delays caused by collection actions.

“I want to keep my estate private.”

Probate is a public proceeding. But that doesn’t mean that all of your personal business will be advertised across the land. If someone was curious enough, they could visit the Registrar and request copies of the documents filed in any probate case. I don’t know how often this happens, but I would venture to guess not very often.

Of course, if you’re the owner of the Hope Diamond and want to keep that tidbit of information private, kudos. But for most people, there is little reason for privacy concerns.

Conclusion: Consider Your Goals

There are many personal reasons why someone may choose a Trust over a Will or vice versa. It is not my place to persuade you but I have participated in both probate and Trust administration, and I feel a duty to share my experiences as they’ve occurred in reality (not just on paper or as explained at a fancy dinner seminar).

If you think you want a Trust and your sole/primary reason is to avoid probate, I urge you to get a second (or third) opinion before you decide. Weigh all of the factors before you make a choice. Far too many “estate planners” will talk up a Trust plan because it is more expensive which only benefits the planner.  

Through Lex-Pro Services, I will competently prepare your estate plan documents without judgment. Before we get started, I provide a free consultation during which I explain the difference between a Will and a Trust, and answer all your factual questions.

To schedule a free initial consultation, please call, text, email or use the “Contact Form” on my website.

Services & Fees are available on my website: http://www.lex-pros.com