Article on Altering the Current Coogan Law To Protect Children
It’s a story heard time andagain. A child, once famous, now broke. Fame, money, and youth equal problems:Michael Jackson, GaryColeman, Macaulay Culkin, Corey Haim, Shirley Temple. The list goes on and on: Children whose parents forgotthat they are supposed to protect their children–emotionally and financially.When children earn substantial amounts of money, parents have something togain. They frequently manage their children’s money, and with the desire forpersonal gain, they face an enormous temptation to disregard their fiduciaryresponsibilities. To protect children against these potential problems causedby their parents, the California legislature has adopted a statutory schemeknown as Coogan Law.
Coogan Law is a popular name for sections 6750through 6753 of theCalifornia Family Code. Before the enactment of Coogan Law, common law did nothelp ease the financial tension between parent and child because a minor’searnings belong to his or her parents. Children were at the mercy of their parents, who oftenmismanaged the money earned by their children. As Marc Staenberg and Daniel Stuart point out, “instancesof financial exploitation of child performers by their own parents cr[ied] outfor legislative intervention.”
Coogan Law provides statutory authority designating income earned by aminor under an entertainment contract as the minor’s property, rather than theproperty of the minor’s parents. These statutes were first enacted in 1939, substantially revised in 2000, and subsequently amended in 2004. But despite these ongoing efforts to provide financialprotection, the adverse interests of parents and their children persist. Theconcern that many child entertainers are not yet adequately protected invitesclose scrutiny of the law to assess whether changes are still required toassure children in the entertainment business have optimal protection.
This note examines the current Coogan Law and proposes changes to affordgreater protection to children working under entertainment contracts. Part IIof this note explains the history of Coogan Law from its inception to its mostrecent revision. Part III examines the current law and its loopholes: (1) theproblems associated with court approval; (2) the inadequacy of the fifteen-percentrequirement; (3) the inherent problems with parents as trustees; and (4) thestatutory termination of the trust at the age of majority. Finally, part IV ofthis note proposes changes to the existing laws, aimed at curtailing each ofthe problems above and ultimately increasing the financial protection availableto children working as performers in the entertainment industry.