Setting up a Child Performer Trust for Your Child
An attorney can help you set up a child performer trust, also known as a “Coogan Trust” for your child so that you can be sure your child has access to the funds they earn as a performer. New York is just a handful of states that have special rules in place when it comes to the compensation of child entertainers. There are very specific laws in place that are meant to protect child performers by setting up a special trust for part of their earnings, ensuring that they will have access to the money they earned as a child once they reach adulthood.
Coogan Trusts are named after child actor Jackie Coogan, who acted with Charlie Chaplin in the 1920s. When Coogan turned 21, he discovered that little was left of the money he had earned as a child actor, as it was spent by his parents. He only was able to recover a small amount of his earnings from his mother after litigation. Coogan laws were set up in New York, California, Louisiana and New Mexico, each dictating that part of a child performer’s earnings be set aside until adulthood so that the performer had something to show for the work they did as a child.
In New York, a child performer’s parent or guardian must set up what is called a “blocked trust” within 15 days of that child starting employment in the entertainment industry. This trust would forbid the withdrawal of any funds until that child turns 18 years old. Once this trust is set up, 15% of the child’s earnings must be paid by the employer directly into the trust. For jobs where employment is 30 days or less, payment must happen within 30 days of the end of the job. For ongoing employment, 15% of each paycheck must be put into the trust at the end of each pay period.
In order to guarantee that a parent sets up and maintains the child performer trust, New York connects setting up the trust to the work permit that must be issued to every child performer in the state. If there is no trust set up on behalf of the child, there can be no renewal of the work permit. Additionally, if the employers do not have trust information given to them by the child’s parent at the beginning, they are required to still turn over the 15%, although it would not go to the parents, instead would go to New York State Comptroller on the child’s behalf.
Banks such as Chase, Citibank, Bank of America, PNC Bank, Wells Fargo or your local bank all have the ability to set up a Child Performer Trust account. Child performer trust account Chase is a popular option.
Once the child turns 18, they can withdraw the money that is put aside in the trust for them. All the child performer would have to do is go to the bank where the trust account is set up with proper ID and proof of age. If this money is not withdrawn after three years, there is a possibility that the money would go to the State. As with any trust, it is advisable that a qualified attorney assists in the setup and maintenance of the trust.