What Is a Coogan Account?

Jackie Coogan Wikipedia

Shortly after our arrival in L.A., I was told I needed to set up a Coogan account for my daughter.

I did not know what a Coogan account was, why I needed one for my daughter, how it would work, or what to look for when setting up this sort of account.

Since I knew so little about a Coogan account, when I called banks to inquire about it, I struggled to explain what I needed.

Our family was maintaining two households at that time, one in South Carolina and one in Burbank, and that was a big drain on our finances. So what was most important to me then was to minimize the up-front cost in setting up the account.

So, I asked only two questions. First, I asked:

Do you have Coogan accounts?

And if the answer to that question was yes, I asked:

How much money is required to open the account?

So I opened the account at the place requiring the smallest initial deposit, but was this the wisest choice? This was important, but there were other things I should have thought about as well.

If your child is just getting started in showbiz, you may be wondering, “What is a Coogan account?” and “Why do I need a Coogan account for my young actor or model?”

Continue reading for answers to these questions and other information related to setting up a Coogan account.

In order for your child to work in show business in the state of California (and in some other states, too), you must have a special bank account set up for your child into which the money that he or she earns can be deposited.

Why is this?

Well, many years ago, there was a very successful child actor named Jackie Coogan. He first worked in Vaudeville shows and in silent films, and then starred with Charlie Chaplin in the movie The Kid in 1921.

Many other film roles for Jackie Coogan followed after that one, and he earned a substantial amount of money. Unfortunately, his mother and stepfather squandered nearly all the money he earned.

Jackie Coogan filed a lawsuit to get money back from them, but he only ended up getting a small portion of his actual earnings.

It was this lawsuit that resulted in legislation in the state of California referred to as the California Child Actor’s Bill (a.k.a. the Coogan Bill and the Coogan law).

This law mandates that employers of a child actor or model deposit 15% of the money earned by that child into a special account called a Coogan blocked trust account (a.k.a. a Coogan trust fund, a Coogan trust account, or a Coogan account).

It is the responsibility of the parent or guardian of the child to set up this account for the child. So how do you set up a Coogan Trust Fund?

First, research financial institutions to find ones that have Coogan accounts. Find out how much the initial desposit has to be, and also be sure to check into what the interest rate will be. Since this money is going to be left there for many years, finding a good interest rate is also important.

In some banks, the account is a junior savings account that is blocked from withdrawals. This type of account typically has a very low interest rate. The SAG/AFTRA Credit Union often has the best rates and options for a Coogan account.

After choosing a financial institution, just take your child’s social security number and the money or a check for the initial deposit, and tell them to open a Coogan blocked trust account for your child with you as the trustee.

It is a good idea to ask them exactly what documentation you need to open the account. Typically, they require a certified birth certificate for the child and proof of your identity (driver’s license or passport).

After opening the account, make sure to get a letter from the financial institution. This letter should have:

the name, full street address, and phone number of the financial institution branch where the account was opened,
the date the account was opened,
the type of the account specified as a blocked trust account,
the routing number and account number, and
the signature of the financial representative who set up the account.

Immediately make several copies of this letter, filing the original at home and giving one to each of your child’s talent representatives.

A California entertainment work permit is considered invalid 15 days after it is issued unless proof of existence of a Coogan account for the child is attached. So it is a good idea to file the work permit and Coogan Account information letter together.

When a child is employed in the entertainment industry, this information must be supplied to the employer so that the appropriate deposits can be made into the child’s Coogan blocked trust account.

Since this account is a blocked trust, money can be deposited into the account, but no money can be withdrawn from this account by any person for any reason. Only the child can withdraw money from this account on or after his/her 18th birthday or when legally emancipated.

Note that a Coogan trust account can be transferred from one financial institution to another. So if you find better interest rates and want to move the account, just follow the specified procedures for transferring the account.

For more tips on this and many other topics related to children in show business, please subscribe to Your Young Actor’s Newsletter.

To your child’s success,

Debbie Sikkema

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Child Acting, Los Angeles Acting | Debbie Sikkema | March 23, 2009 4:37 pm

18 Comments

By Roy MacKinnon, March 24, 2009 @ 7:07 am

First Entertainment Credit Union also offers Coogan Accounts. They are the largest credit union serving employees of the entertainment industry and their Coogan can earn 7% APY on the first $500 in deposits when eStatements are used.
By Hot holiday toys for your children, May 2, 2009 @ 6:32 pm

Thanks for the good work guys,i am glad to see finally what you have been working on all these months
By kathy from Irvine Attorney, June 5, 2009 @ 11:39 am

Very informative.
By Stevie from Solicitors Sussex, June 16, 2009 @ 3:17 am

It’s kind of sad this is neccessary and parents aren’t trusted. But then I suppose some can’t be so it probably is a neccessary law.
By Debbie Sikkema, June 19, 2009 @ 12:42 pm

Yes, most parents are responsible about it, but it really is best to protect our kids this way!
By Scott from Chicago Business Attorney, October 9, 2009 @ 1:46 pm

I think this is a great idea to protect children’s earnings. Too many parent’s in the past have wasted away money their children have worked very hard to earn.
By trading system, January 15, 2010 @ 9:09 am

Coogan accounts are very interesting. Thanks for the information!
By motocross suspension, January 22, 2010 @ 8:53 am

Very crazy that parents used to be able to spend their children’s money like that. I am glad that legislation made this a law. It is very much needed.
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