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    Coogan Accounts for Kids
    Coogan Accounts for Kids
    Coogan Accounts for Kids
    Ebook125 pages1 hour

    Coogan Accounts for Kids

    By Keith V. Abramson

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    About this ebook

    To Baby Boomers, Jackie Coogan was the bizarre and beloved “Uncle Fester” in the equally bizarre and beloved 1960’s “Addams family” TV show which was strangely based upon the New Yorker cartoons by Charles Addams.

    To the Baby Boomers’ parents, Coogan was the titular juvenile co-star for Charlie Chaplin’s “The Kid” back in the early 1920’s. At that time, the young motion picture industry had neither sound nor kids in their distributed films. Chaplin and Coogan changed the latter detail, and for that alone, perhaps all young performers owe a debt of gratitude to pioneers such as Jackie Coogan.

    Today, most people in the entertainment industry know the Coogan name, if not the performer himself, because of the California led legislation instituted to deal with the peculiar aspects of the underage "actor, actress, dancer, musician, comedian, singer, stunt-person, voice-over artist, or other performer or entertainer, or as a songwriter, musical producer or arranger, writer, director, producer, production executive, choreographer, composer, conductor, or designer”, all of which generally populate most of our popular entertainment media. The legislation was spurred on simply by the amount of money involved, both as compensation and in production costs.

    This book is concerned with the so-called “Coogan Accounts”, where and what to invest in, and how to keep everything “on track”, including a sample trust document and the applicable statutes.

    LanguageEnglish
    PublisherKeith V. Abramson
    Release dateDec 4, 2013
    ISBN9781310618192
    Coogan Accounts for Kids
    Author

    Keith V. Abramson

    Keith V. Abramson, JD is a graduate of Tulane University, The University of Connecticut School of Law and Main Event Management Institute. He is the author of over 200 publications and is a well known expert in estate, business, tax, insurance and financial planning. In the high end planning arena, he is best known as the creator of the Reverse Split Dollar Technique and the Abramson Oral Trust Technique. An experienced child performer, his first acting job was a national Tide Detergent commercial in the early 1960's. He can be contacted at CooganAccount@Yahoo.com.

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      Book preview

      Coogan Accounts for Kids - Keith V. Abramson

      COOGAN ACCOUNTS FOR KIDS

      by

      Keith V. Abramson, JD

      AMERICAN LEGAL PUBLISHING

      Montecito, California

      (CooganAccount@Yahoo.com)

      COOGAN ACCOUNTS FOR KIDS

      Copyright Keith V. Abramson, JD 2013

      Published by AMERICAN LEGAL PUBLISHING at Smashwords

      Introduction

      To Baby Boomers, Jackie Coogan was the bizarre and beloved Uncle Fester in the equally bizarre and beloved 1960’s Addams family TV show which was strangely based upon the New Yorker cartoons by Charles Addams.

      To the Baby Boomer’s parents, Coogan was the titular juvenile co-star for Charlie Chaplin’s The Kid back in the early 1920’s. At that time, the young motion picture industry had neither sound nor kids in their distributed films. Chaplin and Coogan changed the latter detail, and for that alone, perhaps all young performers owe a debt of gratitude to pioneers such as Jackie Coogan.

      Today, most people in the entertainment industry know the Coogan name, if not the performer himself, because of the California led legislation instituted to deal with the peculiar aspects of the underage actor, actress, dancer, musician, comedian, singer, stunt-person, voice-over artist, or other performer or entertainer, or as a songwriter, musical producer or arranger, writer, director, producer, production executive, choreographer, composer, conductor, or designer, all of which generally populate most of our popular entertainment media. The legislation was spurred on simply by the amount of money involved, both as compensation and in production costs.

      This publication is concerned with the so-called Coogan Accounts, where and what to invest in, and how to keep everything on track, including a sample trust document and the applicable statutes. However, before we begin, it is important to understand the rest of the story to fully understand how we got to where we are today.

      The Rest of the Story

      The generally accepted theory is that Jackie Coogan’s parents and/or guardians stole all or most of the millions of dollars he earned as a child actor, and when he reached majority age, (then 21), he sued to get the few dollars that were left. Needless to say, Coogan was well paid by Chaplin, and apparently Chaplin helped him financially later on when Coogan was a young adult.

      The common law or generally accepted legal historical prospective on child labor and earnings, etc., was that a child‘s earnings belong to the child’s parents. And, naturally, the parents have an obligation to adequately care for and support their children. So what Coogan’s mother did was nothing new, or unexpected, and, is still generally acceptable in a majority of the states!

      When Coogan grew up, Orange County was filled with farms, rather than Disneyland, businesses and homes. Most kids brought up on these farms had chores to do, and typically made more important contributions to the family business as they matured. However, when these young farmers reached majority age, nobody ever considered the kids had a claim on the farm business or real estate by virtue of the work they performed throughout their childhood.

      When it came to the work Jackie Coogan happened to do as a child, and the earnings, Coogan’s mother felt the same way, and in fact that was the basically successful defense to Jackie’s lawsuit. Shirley Temple supposedly faced a similar fate with reportedly almost a dozen family members supported by her earnings.

      The only difference between a child toiling on the family farm and Jackie Coogan’s work performing is that young Jackie’s activities directly brought in millions of dollars which were used not only to support him but also to support a very lavish lifestyle for his adult family members. But that was enough to create a public outrage and get the legislature to enact some new laws to protect part of the child performer’s earnings.

      But there was also another key component for the so-called Coogan Laws, which changed the statutory approach to child performers under the old studio system. This part of the law dealt with the actual contracts signed by and for the benefit of the child performers.

      In general, contracts between minors and an adult are voidable, unless the contract was for necessities, i.e. food, shelter, etc. This means that, before the Coogan Laws, a studio could have 90% of a major film completed at the time the child star reaches majority age, and then have the child star legally void the contract and ask for an outrageously higher payment to complete the film – sort of legal blackmail. More often than not, the actual voiding the contract problems dealt with manager’s contracts – and this still goes on today. The legislation provided a method of having the court review the contract and make it binding beyond the minor reaching majority age. But this part of the legislation is beyond the scope of this book. (The current law is reproduced in Appendix A.)

      Before we go any further, it critical to remember that the provisions of the California law are not binding in any other state, provided neither the employer or the child performer are domiciled or residing or working in California.

      The two states with the major industry connections and Coogan legislation are California and New York. The California law is more stringent than the law in New York, which otherwise generally follows the California approach. One might compare the situation to the vehicle emissions laws in California verses the rest of the country. If a manufacturer produces a vehicle compliant with the California law, they know it will be acceptable everywhere. So the better approach is to be compliant with the California law.

      When it comes to Coogan Accounts, the proper perspective is that it is hard enough to get an entertainment job, so you do not want or need any extraneous distractions affecting your employment. We often refer to this as being easy to do business with.

      In California, a minor’s work permit requires there be an associated Coogan Account set up within a few days. Every employer will want to see that the minor has such an account – and their bookkeeper will make the direct payments there. In addition, each employer will want proof of membership in the union evidenced by a Union Card. The employer will DIRECTLY pay 15% of the child’s earnings into the account. There isn’t much choice with the union card, but there are with Coogan Accounts and/or supposed accounts that may or may not comply. Therefore, the place to begin is to make it simple and get a Coogan Account from the SAG Credit Union. The employer’s bookkeeper won’t have to simply view you as someone who is easy to do business with. As funds accumulate, you may seek more appropriate accounts for the Coogan Funds, as specifically provided for in the statutes, however, that has nothing to do with your employer’s bookkeeper.

      The Actual Accounts

      A Coogan Account is otherwise known and referred to as a Blocked Trust. In simple terms it just means that whatever goes into such an account or accounts cannot be removed prior to the minor reaching majority age, without a court order. Thus, withdrawals are blocked.

      (Appendix B includes a brief discussion of trusts, trust terms and trust participants, as well as a sample trust document. The sample trust is for review purposes only. You should refer to your own attorney and rely only upon him or her for legal advice).

      The legislation goes a bit further to make sure someone doesn’t game the system. Thus, your Coogan account cannot invest in your father’s home, nor your Uncle’s small business, or otherwise utilize the funds for the direct benefit of anyone. In fact, the law requires that if the account generates income, the taxes and assorted expenses CANNOT be paid from the account. On this point there is currently a lawsuit against the Bank of America for automatically assessing fees for Coogan Bank Accounts with a balance of less than $300.

      This untouchable status of the Coogan Accounts often leads the unwary into a financial bind wherein the minor earns a substantial amount during the year and the 85% not placed into the Coogan Account is either consumed or invested in illiquid assets, and no one has the funds to pay taxes and other legal or accounting fees. But there are ways of handling this – if you plan ahead.

      Now here’s where things get a bit tricky. In general our national investment system is supposedly and intentionally structured and governed so that everyone is on the same level playing field. If someone

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