Coogan Accounts are named in honor of Jackie Coogan, who was one of the first truly huge child stars, and one of the first whose fortune came in part from heavy merchandising. His earnings amounted to between $48 and $65 million in today’s dollars, but when he came of age and asked his parents for his money, Jackie discovered that they had squandered nearly all of it on extravagant living.
This profound injustice led to the “Coogan Law,” which requires that 15% of all earning by a minor in the state of California be set aside in a blocked trust until the child is 18. Other states have similar laws. Check your state’s website for their specific labor laws. A good source of direct links can be found online on the SAG-AFTRA State Statutes page.
NOTE: As of January 1st, 2014, the California law has been modified. It now reads, in part: “… it is required that 15 percent of the minor’s gross earnings be set aside by the minor’s employer, except an employer of a minor for services as an extra, background performer, or in a similar capacity.…” In other words, if your child is working as a background player/extra, making something like $100/day, the requirement to deposit 15% of that small check has now been waived. This makes sense and reduces an unnecessary paperwork burden for everyone.
Still, if you and your child aspire to have them performing in featured or speaking roles, you need to set up a Coogan. It is easy to set one of these accounts up, though not all banks offer Coogan/Blocked Trust Accounts. Check with the SAG-AFTRA website to get an updated list of good Coogan Account institutions.
An important aside: another aspect of the Coogan Law makes clear that 100% of the minor’s earnings in fact belong to the minor. There seems to be a lot of confusion about this. The balance of your child’s earnings– after the 15% is secured in the Coogan Account –does not belong to the parents or family.
This can be a difficult truth for parents. It can be challenging to make ends meet if you are living on only one income because one parent is providing full-time support for their child’s career. If you are a single parent, it can be incredibly difficult. Some families deal with this by cutting a parent in as a “manager” for 5%, 10%, or even 15%, though this is still not enough to support a family. Whatever your family decides to do, make sure there is clear communication about it with your child so there are no bitter feelings on either side later.
My book, The Hollywood Parents Guide, available on Amazon contains everything I wish I’d known when Dove and I started this journey, and will save you untold amounts of time, money, and stress. Full of information you MUST know, it also features stories from parents of other kids who’ve made it!
Or book an hour consulting with me to come up with an individualized plan that takes your own unique needs into account. For about the cost of an hour with a professional acting coach, you can get your questions answered and a road map to help you move forward toward your dream.
Invest a little in your kid’s future today.
Did you enjoy this post? Share it!