Image via Wikipedia, Coogan Account or Piggy Bank?
It is required by law in California and New York that a percentage of a child’s entertainment industry earnings be deposited into a Coogan Account, a.k.a. a Coogan Blocked Trust Account. In California, only 10 days after getting an entertainment work permit, you must have also opened this special Coogan account specifically for that purpose.
The California Child Actor’s Bill (a.k.a. the Coogan Bill, the Coogan Law, and the Coogan Act) came into being after all the money of child actor, Jackie Coogan, was spent by his parents. He was left with nothing from all his hard work as a child actor. As a young adult, he filed a lawsuit, but was only able to get back a very small amount of all the money he made. For more details on this topic, see “What Is a Coogan Account?”
A question many parents ask is “Exactly how much of the child’s earnings must be deposited into this Coogan Account?”
The amount of money that must be deposited into a Coogan account is 15% of the child’s earnings. Note that this 15% is 15% before any taxes or commissions are deducted. So if your child earns $100 total gross pay, and $70 goes to taxes and paying your child’s representatives and SAG dues, an additional $15 must still be deposited into the child’s Coogan account, leaving only small change!
Needless to say, if money is tight and you need to pay for new headshots, acting classes, and coaching for your child who only makes a small amount of money, there is really nothing left from the child’s earnings after all these deductions to cover any expenses. In that case, the parents must bear the burden of these costs.
But, on the other hand, it really is good for the child to have at least a small portion of the income, no matter how small it is, saved for the future. And since many parents might not be inclined to do this on their own, this law helps to ensure that the child will have at least a little bit of what he or she has earned upon reaching adulthood.
Obviously, the need for the Coogan Account really becomes more of an issue when a child is making thousands of dollars or more. The earnings can easily cover all their acting-related expenses with quite a bit of money left over. In that case, 15% savings seems like a very small amount.
Once the money is deposited into the Coogan Account, it can not be withdrawn by anyone for any reason until the child turns 18 or is legally emancipated from his parents.
Typically, the 15% is deposited automatically into the Coogan Account by the employer. It is the parent’s responsibility to make sure that the money has indeed been deposited, and if it has not, the parent needs to make that deposit.
Many parents save more than the required 15% and perhaps even all of the child’s earnings for the child to have when he or she grows up. If you save more than the 15%, you can put more into the Coogan Account. But just remember that once the money is put into the Coogan Account, even if it is more than the 15%, you cannot make withdrawals for any reason. So it might be wiser to deposit the additional funds into a separate account that does allow withdrawals so you can use some of those funds when necessary.
Unfortunately, according to SAG representatives, it seems to be the case that banks are charging more and more fees on Coogan Accounts. So they are using up the very funds that the State of California set out to protect. It is up to the parents to make sure the bank does not deplete the child’s Coogan Account with all the fees (see “Can a Bank Deduct Fees from a Coogan Blocked Trust Account?” for more details on this topic and what you can do to help protect the money in your child’s Coogan Account).
For more on this and many other topics related to show business, subscribe to Your Young Actor’s Newsletter. You’ll get a free mini-course in getting started in showbiz, plus tips on events, resources, and products that will be of interest to you and your young actor.
To your child’s success,
Debbie Sikkema
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9 comments
Renan from iphone wallpaper says:
July 13, 2010 at 3:09 pm (UTC -8)
wow, I had no knowledge of the law.
I think it’s great that this is done because it is very common that parents today put their children to work in the entertainment industry only to enjoy the furture that the child is about to win.
with this law children can have the money saved, and if your reputation drops rependinamente at least he still has money from their hard work saved.
Sabrina from sarasota family portraits says:
July 15, 2010 at 7:39 am (UTC -8)
15% sounds a tad too small for me …
Anyway, I’m still glad that such a law exists. It protects kids who, unluckily, have parents who take advantage and live off of their kid’s talents and/or good looks.
myanmar room says:
July 18, 2010 at 6:17 am (UTC -8)
Every country should have this type of law. There are more cases in poor country.
Tamara from zorro costume says:
August 6, 2010 at 12:06 am (UTC -8)
This law must be implemented. This is the only way that kids can be protected from the abusers..
Ryan says:
August 16, 2010 at 5:41 pm (UTC -8)
Couldn’t agree more with the first comment.
Kurt from Amidala Costume says:
September 12, 2010 at 5:54 am (UTC -8)
Wow i didnt know these was such law. But i agree with the first comment beacause when a talented kid loses their 15 minutes of fame at least they still got this law to back them up.
hard money los angeles says:
September 22, 2010 at 9:53 am (UTC -8)
I think there are a lot of greedy parents out there sponging off their kids success!
hypoglycemia with no diabetes says:
November 18, 2010 at 3:08 am (UTC -8)
Got to know the information on the diaries of the producers.
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November 5, 2011 at 9:05 pm (UTC -8)
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