I’ve heard that a minor can’t enter into a legal contract. Take someone like Miley Cyrus or Taylor Swift that makes millions before they turn 18, how are their finances legally handled? It’s probably different for each person and parents would have power of attorney in some cases. Can a person turning 18 have the choice of walking away from everything? What are some likely scenarios?
After a number of famous cases in which parents, acting “in trust” for their children, fleeced them out of everything, a number of rules were set up in order to stop that.
In California, this law is called the “Coogan Act.” California Child Actor's Bill - Wikipedia
As to your second question, a basic legal principle is that one who is incompetent to make a contract (as in a minor) is generally not bound to perform that contract, UNLESS he accepts its benefits.
So if Taylor Swift one day decides to say, “screw off, Big Machine Records, Scrappy and I are moving to a cabin in the woods,” well, BMR couldn’t MAKE her perform the contract, but she certainly wouldn’t be getting paid. In fact, she would likely have to return any money advanced to her as payment for future services.
Read Patty Duke’s autobio “Call Me Anna.” She has been on both sides of this situation.
Her mother relinquished legal control of her to John & Ethel Ross when she was a minor. They were supposed to hold a certain percentage of her earnings, minus expenses, for her until she married or reached age 18. When she married at 17, she got a check for $2500, a fraction of the money she had made.
When she and her husband John Astin had legal control over their sons Sean & Mackenize Astin’s earnings, Patty insisted that they themselves pay all the expenses, and the children get the full amount they earned when they reached 18.
Well first of all a minor can legally contract for things he needs to live, like food and shelter. Paying people on their personnel payroll comes under this.
A parent signs the contract for the child.
There are a lot of ways of getting around this. For instance, if I have a kid, I have the kid hire me as their agent, as their manager and as their personal assistant. Now I, the parent, have three salaries.
There is no national law that requires parents set aside part of their child earnings. There are state laws. California law has the most teeth to it and because most acting takes places in California, it’s pretty effective. Everytime some parent figures out a way to “work” the law to their advantage it’s amended to stop that.
So over the years it’s gotten pretty good, though obviously there are some holes in it.
When you have children you can manipulate them easy. For instance, if the child says “I quit.” There’s nothing you can do to stop them. But you could say “Fine quit, we’ll sue your Mommy and Daddy, and you’ll wind up living in the poor farm.” That’s usually enough to get the kid to toe the mark. But if he said "I don’t care,’ there’s nothing that could be done to him.
Parents are entitled to use their child’s earnings, subject to state laws of course. I mean if you work at McDonalds, subject to state law you parents can take that money.
Some parents have means to allow the kids to keep all their money, some don’t.
For instance, I recall reading an interview with Johnny Whitaker (Jodie on “Family Affiar”) he says when he turned 18 his records showed he earned about 5 million dollars, but all he got was $800,000. His parents had used the rest to pay his agents, to put his siblings through college, to pay themselves a salary, because they weren’t working. He said he now realizes that if they didn’t do that, the only alternative was to take him out of show business and get “regular” jobs and he wouldn’t even have had the $800,000. He’d have had nothing and no careeer at all.
Contrast that to Malcolm-Jamal Warner (Theo on “Cosby”) who said his parents refused to have anything to do with his money. They made him get a lawyer and he was forced to attend all the accounting meetings and such, even though he didn’t know what was going on, and his parents met any expenses out of their income.
So some parents are in a position to support their child’s acting, and others have to use their kids income to allow the child to continue to act.
Well first of all a minor can legally contract for things he needs to live, like food and shelter. Paying people on their personnel payroll comes under this.
A parent signs the contract for the child.
There are a lot of ways of getting around this. For instance, if I have a kid, I have the kid hire me as their agent, as their manager and as their personal assistant. Now I, the parent, have three salaries.
There is no national law that requires parents set aside part of their child earnings. There are state laws. California law has the most teeth to it and because most acting takes places in California, it’s pretty effective. Everytime some parent figures out a way to “work” the law to their advantage it’s amended to stop that.
So over the years it’s gotten pretty good, though obviously there are some holes in it.
When you have children you can manipulate them easy. For instance, if the child says “I quit.” There’s nothing you can do to stop them. But you could say “Fine quit, we’ll sue your Mommy and Daddy, and you’ll wind up living in the poor farm.” That’s usually enough to get the kid to toe the mark. But if he said "I don’t care,’ there’s nothing that could be done to him.
Parents are entitled to use their child’s earnings, subject to state laws of course. I mean if you work at McDonalds, subject to state law you parents can take that money.
Some parents have means to allow the kids to keep all their money, some don’t.
For instance, I recall reading an interview with Johnny Whitaker (Jodie on “Family Affiar”) he says when he turned 18 his records showed he earned about 5 million dollars, but all he got was $800,000. His parents had used the rest to pay his agents, to put his siblings through college, to pay themselves a salary, because they weren’t working. He said he now realizes that if they didn’t do that, the only alternative was to take him out of show business and get “regular” jobs and he wouldn’t even have had the $800,000. He’d have had nothing and no careeer at all.
Contrast that to Malcolm-Jamal Warner (Theo on “Cosby”) who said his parents refused to have anything to do with his money. They made him get a lawyer and he was forced to attend all the accounting meetings and such, even though he didn’t know what was going on, and his parents met any expenses out of their income.
So some parents are in a position to support their child’s acting, and others have to use their kids income to allow the child to continue to act.