Trust Accounts

The one thing that most people have heard of in regard to child actors are the laws which are in place to protect their earnings.  In California, it is often called Coogan’s Law, named after child actor Jackie Coogan. Other states may refer to it as a Performer’s Trust Account. The laws in each state are slightly different.

History of Coogan: Don’t Trust the Parents

In order to understand the concept of all Performer Trust Accounts, it is helpful to take a look at a little history from Hollywood, where the law originated.

The original Coogan law was passed in reaction to the plight of Jackie Coogan in 1939.  His parents did not “steal” his money per se, as is often reported.  They did what was legally allowed at the time: the “head of household” used the income as family money.  After the Coogan case, the law remained virtually unchanged for decades.  Every few years, a famous child actor would sue their parents and allege that their parents had stolen their money.  This was a tiny percentage of working actors but the publicity gave rise to the public opinion that child actors were generally mistreated. Advocates stepped forward, including several former child actors, to craft laws and regulations within both SAG-AFTRA and the California state legislature. These laws are fundamentally anti-parent — the idea is to keep you from using your child’s earnings. This is important to understand because the anti-parent sentiment is an assumption that fuels all child performer trust laws today.

• Prior to 2000, the laws that governed mandatory trust accounts for child performers only affected work that was going to be subject to a court-ordered contract.  The standard percentage was 30%. It didn’t include most commercials, or background work, or even some smaller film and tv roles. At that time the Coogan Account requirements and deposit information were included in the wording of the contract. This made it very clear to the employer where the money was to be distributed. The high percentage had become unrealistic though — professional young performers were often now paying high taxes, agent and manager commissions and other standard expenses.  A key case with the Cosby Show children illuminated the fact that it was truly possible to be a series regular on a hit show and be in the red financially.
• In 2000, there were amendments to the Coogan law that made the mandatory withholdings applicable to ALL work in the entertainment industry (SB1162), but also reduced the percentage to 15%.   At this point, it began to apply to commercials, background work, modeling and all television and film roles. While it may seem that it was best to protect ALL child performers earnings, there was a fundamental problem because there was no specific system created (remember, the court ordered contracts were available before). There were requirements about providing trust account information to employers, but no standardized form or method to do so. Including more child performers in the requirement also greatly increased the volume of deductions and deposits.
• The 2000 amendment also made ALL of the earnings of the minor child belong to the child. The child owns 100% of their earnings. This is unique to California, and is an exception to the laws in all other states where money earned by a minor belongs to the family.
• In 2004, more amendments were required because, not too surprisingly, the Coogan system was not sufficient to handle the volume and various account documents. Producers were holding money that they had withheld from child performers, but were unable to locate the account to deposit it. The amendments in 2004 allow producers to send money that they can’t deposit into individual Coogan accounts to The Actors Fund. Other changes included the requirement that a Trustee Statement must be attached to a work permit to ensure the child performer has an account, that a parent has the right to receive a receipt that their child’s Coogan information was received, and that employers need to pay the Coogan portion of the child’s paycheck concurrently with their rest of their paycheck.
• In 2013, they back-tracked.  By this time it became clear that much of the money going to the Actors Fund Unclaimed Coogan Fund was originated from background actors. The deposits were small — 80% of the depostis were for amounts under $99 –so some parents weren’t bothering to open bank accounts with a minimum deposit, and some studios weren’t bothering with the administrative burden to pay them. AB533 in 2013 exempted background actors from the requirement to withhold 15% in trust.

All of that history provides the basis for every other state law.  Today, several other states have Coogan laws (see the slider chart at the bottom of this page by the blue arrow), and a few such as New Jersey and Georgia, have chosen not to include trust accounts in their child labor law at all.

Click this box to see the current version of the California Coogan Law.