Probate Attorney in Chatsworth

Probate Attorney in Chatsworth

Chatsworth’s industrial and light-manufacturing base means a large share of estates here include a company: a machine shop, a distributor, a contractor with equipment and receivables, a small fabricator. That changes probate from a paperwork exercise into a race.

A business does not survive probate well

Real property sits still while a court case runs. A business does not. Employees leave, customers place orders elsewhere, suppliers tighten terms, equipment leases come up for renewal, and licenses and permits have their own requirements that do not pause.

During probate there may be nobody with clear authority to sign a contract, hire a replacement, or borrow against receivables. Banks in particular will freeze on the death of a signatory until they see letters from the court, and letters take time.

So the value the family will eventually receive is falling while the process runs. That is the argument for asking the court early for authority to continue operating the business, rather than waiting for the ordinary sequence.

Valuing a company for the inventory

The estate has to be inventoried and appraised, and a closely held operating business is the hardest line on that document. Its value is in equipment of uncertain age, receivables of uncertain collectability, a customer list, work in progress, and a lease that may or may not transfer.

A probate referee handles most estate assets, but a business of any size usually needs a valuation from someone who does business appraisal rather than real estate. Getting that wrong in either direction causes problems: too high and the statutory fees rise on a value nobody will realize, too low and beneficiaries have a legitimate complaint later.

Equipment, leases and the lender

Two practical items specific to Chatsworth estates. Equipment is often financed or leased rather than owned outright, so what looks like an asset may be a liability with a machine attached. And the building is usually leased, with a lease that may terminate or require consent on a change of control.

Both need reading in the first weeks, because a lease that can be terminated on death is the fastest way for the business’s value to reach zero before anyone has decided what to do with it.

Questions Chatsworth clients ask

The estate includes my father’s business. What happens to it during probate? It keeps running or it decays, and that depends on getting authority quickly. Banks typically freeze accounts on a signatory’s death until they see letters from the court. Asking the court early for authority to continue operating is usually the right move.

Who values a business for probate? Usually a business appraiser rather than the probate referee who handles other assets. Too high and statutory fees rise on a value nobody realizes; too low and beneficiaries have a complaint later.

Where is a Chatsworth probate filed? Downtown at the Stanley Mosk Courthouse, 111 N. Hill Street. Los Angeles County centralizes probate there, and the Chatsworth courthouse does not hear it.

The equipment is leased. Is that an asset? Often not. Financed or leased equipment can be a liability with a machine attached. That needs sorting early, because it changes what the business is actually worth.

What about the building lease? Read it in the first weeks. Many commercial leases terminate or require landlord consent on death or a change of control, and losing the premises is the fastest route to the business being worth nothing.

Talk to Eric or call 805-244-5291. I serve Chatsworth and the surrounding San Fernando Valley communities.

For how probate works and what it costs, see probate in California. To keep a business out of this entirely, see business succession in Chatsworth and living trusts in Chatsworth.