In short, yes. A trust is essentially a list of instructions that apply to whatever property you transfer to it. So, if you transfer your Arizona house to your trust, the instructions of your trust will cover the Arizona house. I have clients with property in Arizona. Because of the differences in the laws of the two states, you may have options for disposition of this house on your death that are less expensive than a living trust. It depends on what your estate is comprised of and what your estate planning goals are. My office is in Thousand Oaks. If you want to discuss it, give me a call.
I think that everyone has fully answered your question. You should have no difficulty placing the Arizona house into your trust. Keep in mind that if you are currently (or plan to be) renting the Arizona property, you may want to consider how the rental income from the property is going to be managed as well. As the other panelists have reiterated, you need to be sensitive as to how the laws of each state affect your transaction. Being licensed both in Arizona and California, I can tell you that there are differences.