It is problematic in California and elsewhere for a small business owner to die without an estate plan. Without estate planning, the business assets will be divided up by the intestate (without a will) laws of the state where the business is located. This lack of planning allows for outcomes that the business owner may not have wanted. It's true that many famous people have died without a will or an estate plan, but the cost to their estates -- along with the stress and trouble to their heirs -- was nearly always immense.
The estate planning process can be easier if broken down into distinct steps. The first is to preplan for the necessary protections in the event of disability or death. There are things like disability insurance, life insurance and a succession plan for the business that must be set in place in advance. Instead of chaos during disability or at death, there can be a well-prepared, well-oiled mechanism that is engaged and that resolves the issues and problems that could have arisen otherwise.
Where one has an ownership share in an ongoing business that will be continued by business partners, a buy-sell agreement with funding is appropriate. It will take care of some vital issues such as how the decedent's share is calculated and the payment of the proceeds to decedent's specified beneficiaries. The transfer may be funded by life insurance purchased by the business so that the person's share will be guaranteed to his or her family members.
In California, it may be beneficial for a business owner to have a team of advisors and professionals who will provide the expertise to set up and carry out the best plan possible under the circumstances. The head of the team is the estate planning attorney, and depending on the circumstances, the attorney can be joined by an accountant or other tax expert, a qualified financial planner and an insurance expert. To get on the right path to this prudent way of handling one's affairs, a consultation with an experienced estate planning attorney would be the logical first step.