Protect your Child Star’s Earnings with a Coogan Account
If you are the parent of a child actor in California, New York, Louisiana or New Mexico, you are required to transfer 15% of your child’s earnings to a blocked trust account, also referred to as a Coogan account. Known as the part of the California Child Actors Bill signed into law in 1939, a Coogan account protects money earned and accumulated under a contract as legal property of the minor child. The parents remain the trustees of the account with the child as the beneficiary until they turn 18 but are restricted from accessing these funds for any reason. Once the actor is 18, they will have access to withdraw the money and use the funds as they see fit.
While many banks offer the option to establish a Coogan account, it may be more challenging to find options for how and where to invest these funds. Depending on the age of your child and their financial needs and objectives, it may be beneficial to work with an experienced financial planner. At Guide My Finances, we work with your child to educate them about financial management and act as the investment advisor to build and execute an appropriate Coogan investment strategy to enable the funds to grow over time. Our experienced team of registered advisors can help guide you in setting up this specific type of trust account.
If you are interested in creating a Coogan Trust Account for your child or have other financial questions, contact us for more information.