Coogan Accounts and Your Child Actor or Actress![Child Actress]( "Coogan Accounts and Your Child Actor or Actress")
How the Coogan Act is Beneficial
Currently New York, New Mexico, Louisiana, and California require the establishment of a Coogan Account or Blocked Trust Account. Generally a documented account will have to be established prior to a work permit being released. Under the Coogan Act 15 percent of the child’s gross earnings are required to be deposited into the account within 15 days of employment. This withholding is posted to the Blocked Trust Account by the employer once they are provided with the account number. The funds in the account are held in trust, and cannot be withdrawn until the child reaches 18 years of age.
Setting up a Coogan or Blocked Trust Account
This type of account can be established at a bank, credit union, savings and loan, or brokerage firm. The account is required to be established within 7 days of the contract signing by the employer and the entertainer. The Blocked Trust requirement applies to all activities that a child may encounter under employment related to the industry. Additionally, the requirement requires to any minor working in the State of California regardless of their state of residence. It also applies to all California based companies regardless of where the work is being performed.
Requirements for Establishment
Accounts set up for this purpose are required to be registered through the Investment Company Act of 1940, and must be insured by FDIC, NCUSIF, or SIPC. The SAG-AFTRA web site refers to the following banking establishments:
- AFTRA/SAG Federal Credit Union
- Actors Federal Credit Union
- Bank of America
- Bank of the West
- City National Bank
- First Entertainment Credit Union
- Morgan Stanley/Smith Barney
- Union Bank of California
- Wells Fargo
Each institution has their own requirements to open a Coogan Account, so you will want to check the requirements prior to setting up the account. This is only a partial listing. If the bank you use is not identified here, check with the bank manager or New Accounts to see if they offer this type of account.
In all cases, the child has to be the beneficiary of the account, and a parent, guardian, or the court must serves as the trustee. Proceeds cannot be withdrawn from the account until the child reaches their 18th birthday. Funds can be transferred to another account of equivalent standing.
Documents Needed for Setting Up a Coogan Account
To set up an account, a certified copy of the child’s birth certificate and a social security card are required. As a parent or guardian you also provide a government issued identification to establish the account.
The State of California understands that the low interest earned through a savings account may not produce the financial results desired. For this reason the funds in a Coogan Account can be invested into other options such as low risk options and CD’s or bonds. It is best to check with a financial planner regularly to ensure that your child’s earnings are being placed in successful investment opportunities.
