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Opening a Blocked Trust Account or Coogan Account For Your Child

Opening a Blocked Trust Account or Coogan Account For Your Child

When your child enters the world of acting or modeling, it can be hard to not see dollar signs in your eyes. Landing one big commercial or advertising campaign can make a substantial deposit into your child’s college fund. And while it can also look like money for a house remodel or a business investment, there are strict rules for the use of money earned by kids in the entertainment industry.

Many states require blocked trust accounts for any minors in the entertainment industry to ensure that the money they earn is safeguarded from misuse. That means that any money your child earns through the work they do is theirs, and a portion of it must be held in an account for them until they turn 18.

A blocked trust account, also known as a Coogan Account, is required in several states: California, Louisiana, New York and New Mexico. Since minors have no legal authority over their earnings, blocked trust accounts were established so that their earnings cannot be squandered.

Fifteen percent of everything your child earns working in the entertainment industry must be deposited into a blocked trust account. Your child’s employer must withhold the 15 percent and deposit it into your child’s Coogan Account within 15 days of hiring.