A Technical but Important Distinction
A deed of trust looks like a property transfer document. It involves real estate, it gets recorded, and it includes legal descriptions of the property. But under Arizona law, it is not classified as a "deed" or a "contract" in the way those terms are used elsewhere in the statutes.
A deed of trust shall not be considered a deed or contract under the provisions of title 42, chapter 10, article 2 or a contract for conveyance of real property under the provisions of title 33, chapter 6, article 3.
A.R.S. § 33-821Why This Classification Matters
Title 42 of Arizona's statutes covers taxation, and Chapter 10 deals with documentary transfer taxes and related provisions. By excluding deeds of trust from that definition, Arizona ensures that creating or releasing a deed of trust does not trigger transfer tax obligations. The borrower is not "selling" property to the trustee. The trustee holds bare legal title solely as a security device.
Similarly, Title 33, Chapter 6, Article 3 addresses contracts for the conveyance of real property, including equitable conversion and other rules that apply when someone agrees to sell or transfer land. A deed of trust is not a contract to convey property. It is a security instrument. By making this explicit, Arizona prevents confusion about the borrower's rights and obligations under a deed of trust.
For families managing real estate through an estate plan, this distinction reinforces that a deed of trust on property held in a living trust does not change the nature of ownership. The property remains in the trust, and the deed of trust simply secures the underlying loan.
