How Much Money Must Be Deposited Into a Coogan Account from a Child’s Earnings?

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?”

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Can a Bank Deduct Fees from a Coogan Blocked Trust Account?

Don't Let Bank Fees Deplete Your Child's Coogan Account, Image via Wikipedia

Understanding exactly what a Coogan blocked trust account is and how it works is no easy feat for a parent of a child actor or model.  Many  employees at banks are just about as clueless about Coogan accounts as you probably are, and some are even more so.

In fact, finding the information you need related to Coogan blocked trust accounts can be next to impossible. Some additional information about Coogan accounts can be found in “What Is a Coogan Account?” and “What Is a Coogan Blocked Trust Account?”

Not long after we opened my daughter’s Coogan blocked trust account, the financial institution hosting it was taken over by another financial institution. They assured me that the transfer of her account would be handled seamlessly.

Trustee’s Statement

I had to have a new trustee’s letter/statement of account (see “What Is a Coogan Account?” for details on the Trustee’s Letter/Statement)  prepared to show all the new information for her Coogan account. The representative wanted to charge me $5.00 since they had previously prepared a statement for me. I asked to speak to the supervisor and got the $5.00 charge waived since it was not my fault. So at this point, I would definitely not have called it seamless, even though everything seemed to be going okay.

Fees Being Deducted From a Coogan Account

When I received my daughter’s first quarterly statement after her Coogan account had been inherited by the new bank, I noticed that fees were being deducted from her account.  I certainly was not happy about the changes to her account that was supposed to remain the same after the transfer.

I proceeded to make phone calls to investigate what was going on with her account at this point.  Why were fees being withheld from her Coogan account?   After talking to three different bank representatives and spending over an hour on the phone, one of the representatives assured me that it was just set up incorrectly and that it would be fixed immediately.

But when her next statement came, I noticed fees were still being deducted each month from her account! I thought the idea of the account being a blocked trust was that no money, fees included, would be deducted from her account. It took another hour of phone calls and finally a visit to the bank to get this problem fixed.

So, “Can a Bank Deduct Fees from a Coogan Blocked Trust Account?”

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What Is a Coogan Blocked Trust Account? (Showbiz Term of the Day)

Coogan Blocked Trust Account Image via Wikipedia

What Is a Coogan Blocked Trust Account?

For those with children interested in the entertainment industry, it is very important to understand what a Coogan Blocked Trust Account is.

As soon as you get a California entertainment work permit (see “Do You Need an Entertainment Work Permit for Your Child Actor?“) for your child, you also need to open a Coogan Account (see “What is a Coogan Account?” for more details) for that same child.

When I was trying to open a Coogan account for my daughter, I was confused and frustrated. I did not even know how to spell Coogan. All I knew was the name Coogan account. I did not really know what it was.

Many of the bank representatives I talked to had never even heard of a Coogan account.  So I went and researched the topic so I had more information to use to communicate with the bank employees.

So, “What is a Coogan Blocked Trust Account?”

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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. Read more »