Business Succession Planning in Calabasas

Business Succession Planning in Calabasas

Calabasas has a dense population of owner-operators: production and post companies, professional practices, property management, consultancies built around one person’s name and relationships. In most of them the owner is the business, and the plan for the day that stops being true has not been written.

Succession comes down to two questions. Who holds legal authority to act, and on what terms does an interest change hands.

Read the buy-sell before anything else

If the company has a buy-sell, shareholder or operating agreement with transfer provisions, that document generally decides what happens to an owner’s interest on death, and it overrides the trust.

The recurring defect is the price. A fixed dollar figure agreed years ago, or a formula tied to a multiple nobody has revisited, can transfer a valuable interest for far less than it is worth. Owners assume the agreement protects them. Often it protects the other side.

The second defect is funding. A buy-sell that obliges surviving owners to purchase the deceased owner’s interest is only as good as the money available to do it. Without insurance or a funded reserve behind it, the obligation is a promise that cannot be kept, and the family ends up negotiating rather than being paid.

The authority gap while probate runs

If the ownership interest is not held in a trust, it goes through probate, and during that period there may be nobody with clear legal authority to sign contracts, manage employees, deal with the bank or make decisions. For a business with payroll and client commitments, months of that does real damage, and clients do not wait.

Holding the interest in a funded trust removes the gap. A successor trustee has authority immediately, without a court appointment, subject to whatever the operating agreement says about who may hold and vote the interest. That last point is why the two documents have to agree.

Deciding who should take it

The default assumption is the children. Often that is wrong, and saying so early is more useful than drafting around it. One child works in the business, or none of them do, or the one who wants it is not the one who can run it.

A sale to a third party or to key employees is a legitimate and often better answer. So is winding the business down deliberately rather than leaving heirs to discover it has no value without the owner. That decision belongs to the owner while they can make it.

What the court can and can’t do for a Calabasas business while probate runs

If the owner’s interest is still in their own name, a probate case is the only source of authority, and it’s heard downtown. Los Angeles Superior Court Local Rule 4.3(a) files and hears all probate matters outside the North District at the Stanley Mosk Courthouse, 111 N. Hill St., Los Angeles. Nobody has authority over the owner’s interest until the court appoints someone, and that gap is when payroll, leases and client contracts don’t get signed.

The law has two tools for the gap, and both have limits. If the circumstances of the estate require an immediate appointment, a court may appoint a special administrator to exercise powers appropriate for the preservation of the estate under Prob. Code § 8540. That is a stopgap for a specific term or task. Once a personal representative is appointed, Prob. Code § 9760 lets them continue an unincorporated business, but not for more than six months from the date letters first issue without a court order. A petition to keep going has to show the advantage to the estate.

The rule reaches an unincorporated business or venture. It excludes a business operated by a partnership in which the decedent was a partner, and a company held through an LLC or corporation is governed by the entity’s own documents, which is why the operating agreement matters more than the will. A trustee is different: under Prob. Code § 16222 the trustee may continue a business only as authorized by the trust instrument or by the court, though for a reasonable time pending a court hearing or a sale. A trust that authorizes the trustee to run the company in so many words is doing real work.

Who is acting	What the law lets them do	Limit
Special administrator (Prob. Code § 8540)	Exercise powers appropriate for the preservation of the estate	A stopgap for a specific term or task
Personal representative (Prob. Code § 9760)	Continue an unincorporated business	Not more than six months from the date letters first issue without a court order
Trustee (Prob. Code § 16222)	Continue a business as the trust instrument authorizes	Otherwise only with court authorization, for a reasonable time pending a hearing or sale
LLC or corporation	Governed by the entity’s own documents	The operating agreement matters more than the will

The probate fee math when the owner also holds the house

Many Calabasas owners keep the business in an entity and the home or a building outside it. Both then sit in the same estate. The typical Calabasas home is worth $1,688,461 (Zillow Home Value Index, August 2026). Add a business interest appraised at $1,000,000, an illustrative figure, and the statutory fee base moves from $1,688,461 to $2,688,461.

Estate made up of	Gross value	Each: executor and attorney	Both together
The typical home only	$1,688,461	$29,885	$59,770
The home plus a $1,000,000 business interest	$2,688,461	$39,885	$79,770

Prob. Code §§ 10800 and 10810 base the fee on the appraised value of property in the inventory, without reference to encumbrances or other obligations. The statutory fee schedule allows those amounts. It doesn’t say any family will be billed them, and the figures are for an estate of only those two assets. A funded trust holding both keeps the estate out of that schedule.

Paperwork that follows a change in who owns the company

A company that owns real property has a tax filing of its own when control moves. Whoever acquires control of an LLC, a partnership or a corporation must file a change in ownership statement with the State Board of Equalization within 90 days of the change in control, and the statement must list all counties in which the entity owns real property. A buy-sell that hands the deceased owner’s shares to a partner can be that change in control, so the closing checklist should include the filing.

The company’s own records need the same attention. A California LLC must file a statement of information with the Secretary of State within 90 days of forming and every two years after, and it lists the managers. When a manager dies or resigns, that public record is out of date, and banks and title companies read it. For the formation side, see entity formation.

Questions Calabasas clients ask

We have a buy-sell from years ago. Is it still good?

Check the price terms first. A fixed value or an untested formula can transfer your interest for far less than it is worth, and the agreement generally controls over your trust. It’s a common and expensive defect.

Is the buy-sell funded?

Ask, because many are not. An obligation for surviving owners to buy your interest is only worth the money available to honor it. Insurance or a funded reserve is what turns it from a promise into a payment.

What happens to the business if I die without a plan?

If the interest is not in a trust it goes through probate, and there may be nobody with clear authority to sign contracts, manage staff or deal with the bank for months. For a service business that is often fatal to the client base.

Can my trust just hold the company?

Usually yes, and it should, but the operating agreement has to permit a trust to hold and vote the interest. Some restrict it or require member consent, which is easy to arrange now and difficult later.

What does this cost?

Entity formation is flat-fee: $2,500 single-owner, $5,500 multi-owner, $4,500 for a professional corporation. Contract review, standalone buy-sells and ongoing advisory are $500 per hour.

Who can run my company in the weeks right after I die?

It depends on how the interest is held. For an interest in a funded trust, the successor trustee acts at once within the operating agreement. For an interest in your own name, a court can appoint a special administrator to preserve the estate under Prob. Code § 8540. Managers named in the operating agreement can often keep operating the company in the meantime, which is another reason to check who they are.

How long can a personal representative keep my business open without a court order?

Not more than six months from the date letters are first issued, under Prob. Code § 9760. After that a petition has to show the advantage to the estate. The rule reaches an unincorporated business, and an LLC or corporation follows its own governing documents.

Does a buy-sell close trigger a property tax filing?

Possibly. Obtaining more than 50 percent of the ownership interests in an entity is a change in ownership of the real property the entity owns under Rev. & Tax. Code § 64(c)(1), and the acquirer files a statement within 90 days. That filing belongs on the closing list whenever the company owns real estate.