Estate Planning in Tarzana

Estate Planning in Tarzana for Physicians, Dentists, Therapists, and Other Licensed Practice Owners

Tarzana sits inside the City of Los Angeles, and the professional offices along its stretch of Ventura Boulevard hold a concentration of physicians, dentists, psychologists, therapists, accountants, and attorneys who each own the practice they built. A standard will-and-trust package written for a homeowner with a paycheck does not fit that ownership. When a licensed professional dies or loses capacity, the practice does not pause: patients still need appointments, staff still need to be paid, and in California the person who inherits the ownership interest usually cannot simply step in and run it, because the license belongs to the professional, not the heir. I’m Eric Ridley, an estate planning attorney serving Tarzana and the rest of Los Angeles and Ventura Counties, and this is the problem I build these plans around.

Why a licensed practice cannot pass like other assets

A medical, dental, therapy, accounting, or law practice is typically organized as a professional corporation or a similar licensed entity, and California generally restricts ownership of that kind of entity to people who hold the same professional license. A spouse, adult child, or other heir who is not licensed cannot simply inherit your shares and keep the practice running the way they could inherit stock in an ordinary company. Left unaddressed, the ownership interest still passes through your estate, but there may be no one legally eligible to own or operate it, and it can sit unable to bill, hire, or be sold while the estate figures out what to do with an asset almost no one else is allowed to hold.

Incapacity is the more likely event, and the more urgent one

Death gets most of the attention in estate planning conversations, but a stroke, an injury, or a slow decline that leaves you unable to work is more common, and it creates the same problem faster. An owner who cannot sign, cannot see patients or clients, and cannot make decisions still has a lease payment due, a payroll to run, and active relationships that do not wait for a recovery timeline. A durable power of attorney that specifically authorizes your agent to act in the practice, sign on the business accounts, and deal with your professional corporation’s own governing documents is what keeps the practice functioning while you recover, or gives someone clear authority to wind it down if you do not.

A buy-sell agreement, or a wind-down plan, decided now

For a solo owner, the plan is usually a wind-down: written instructions and enough authority for a trusted person to notify patients, transfer files, close out billing, and sell or dissolve the practice in an orderly way rather than an abandoned one. For an owner with co-owners, the better tool is a buy-sell agreement among the licensed owners themselves, fixing a price or a formula in advance and typically funded with life insurance so a buyout does not have to be paid out of operating cash. Either way, decide now who is authorized to act, instead of leaving that decision to whoever is left standing after a health emergency.

The trust has to hold the interest correctly

A revocable living trust is still the right foundation, but professional corporation shares, a partnership interest, or an LLC membership interest each have their own transfer rules, and a governing document that bars a transfer to a trust, or requires any buyer to be licensed, can defeat the plan if it was never reviewed. I read the practice’s bylaws, shareholder agreement, or partnership agreement alongside the trust so the two work together instead of against each other. See living trust planning for how the trust fits with the rest of a plan.

Beneficiary designations can undo all of it

A retirement plan account, whether it is a SEP-IRA, a solo 401(k), or a defined benefit plan common among higher-earning professionals, and any life insurance meant to fund a buyout, pass by the beneficiary form on file with the custodian or insurer, not by your trust or will. A form filled out when the practice was smaller, or before a partner joined, or before a divorce, can send that money to the wrong person no matter what your estate plan says. I check these forms as part of the planning, because the form controls.

What your practice interest costs in Los Angeles County probate

Tarzana probate runs through the Los Angeles County Superior Court. Without a funded trust, your practice interest and any outstanding patient or client receivables are assets of your estate like any other, appraised and counted at full gross value for the statutory probate fee. That fee is set by Probate Code § 10810 for the attorney and § 10800 for the personal representative, and both may take it, so it is effectively charged twice. The schedule runs 4% of the first $100,000, 3% of the next $100,000, 2% of the next $800,000, 1% of the next $9,000,000, and 0.5% of the next $15,000,000, with amounts above $25,000,000 set by the court. Say your estate includes a home worth $1,000,000 carrying a $700,000 mortgage, a $300,000 interest in your practice, and $200,000 in receivables the practice is owed: a gross estate of $1,500,000. The mortgage does not reduce the fee base. The fee works out to $4,000, plus $3,000, plus $16,000, plus 1% of the remaining $500,000 ($5,000), for $28,000 for the attorney and another $28,000 for the personal representative, $56,000 combined, before any extraordinary fees for selling or winding down the practice itself. A funded trust avoids that fee and that timeline entirely. Run your own numbers with our California probate fee calculator, and see how probate works.

Prop 19 and the Tarzana home

If a home sits alongside the practice on your personal balance sheet, Prop 19 affects how it passes to your children. The parent-child exclusion now requires the child to move in as their own principal residence and file for the homeowners’ exemption, and even then the exclusion is capped: a home can currently pass with its factored base year value preserved up to that value plus an indexed amount of $1,044,586, which applies to transfers occurring between February 16, 2025 and February 15, 2027. Value above that limit gets added to the new assessed value. A rental unit, a second home, or a house your children intend to hold as an investment rather than live in does not qualify and is reassessed at market value. Source: California State Board of Equalization, boe.ca.gov/news/2025/nr-25-02.htm. See Prop 19 planning for how this interacts with the rest of your plan.

The federal estate tax rarely drives this planning

The federal estate and gift tax exemption is $15,000,000 per person, or $30,000,000 for a married couple, made permanent under the One Big Beautiful Bill Act, and the 2026 annual gift tax exclusion is $19,000 per recipient. Most Tarzana practice owners, even successful ones, are well under that number, so the federal estate tax is rarely the reason to do this planning. The reason is control: who is authorized to act the day you cannot, who has the money to buy your interest, and whether your family inherits a practice that keeps running or an asset no one is legally allowed to own.

If part of your estate is meant for a family member on benefits

If a share of a buyout, or the eventual sale of your practice, is intended for a family member who receives SSI or Medi-Cal, leaving it to them directly can end those benefits. That share should go into a properly drafted special needs trust instead of a direct bequest. See special needs trusts.

Tarzana Estate Planning FAQs for Practice Owners

What actually happens to my practice if I die without a plan?

Your ownership interest becomes part of your probate estate. If it is a professional corporation, no one who inherits it can necessarily step in and run it unless they hold the same license, so it often has to be sold or wound down on the court’s timeline rather than yours.

Can my spouse or an adult child just take over my practice?

Generally not, if they are not licensed in your profession and the practice is a professional corporation or similar licensed entity. They can inherit the economic value of the interest, but running the practice is usually a different question, which is why a buy-sell agreement or a wind-down plan matters more here than in an ordinary business.

Which court handles probate for a Tarzana practice owner?

Tarzana is part of the City of Los Angeles, so probate runs through the Los Angeles County Superior Court. A funded living trust, with the practice interest and other assets properly held in the trust, keeps your estate out of that process.

I’m a solo practitioner with no partners. Do I still need a buy-sell agreement?

Not a buy-sell agreement in the usual sense, since there is no co-owner to buy you out. What you need instead is a wind-down plan: a power of attorney and trust provisions that name someone with clear authority to notify patients or clients, transfer or close out files, handle billing, and sell or dissolve the practice if you cannot return to it.

Can we do this without me stepping away from my practice for a string of appointments?

Yes. Most of this work happens by video, on a flat fee quoted up front, with a single signing appointment. I understand that a practice owner’s time is the thing in shortest supply.

Related planning for Tarzana practice owners

See also living trust attorney, wills, Prop 19 planning, and special needs trusts. Nearby: Encino and Woodland Hills. For background, see probate and fees.

Book a consultation at https://ridley.click/eric-60 or call 805-244-5291. I serve Tarzana and all of Los Angeles, Ventura, and Santa Barbara Counties.

Before you meet with anyone, compare estate planning attorneys in Tarzana on your own terms. Credentials and State Bar numbers are listed, so you can check whoever you are considering before signing anything.

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Tarzana falls under Los Angeles County probate and the Los Angeles Registrar-Recorder for deed recording. For how that works in practice, see living trust attorney in Los Angeles.

Written by Eric D. Ridley: Estate Planning Attorney, Ridley Law. Serving Ventura, Santa Barbara, and Los Angeles Counties since 2010. Learn more about Eric →