When Children and Teenagers Earn Money, Are the Parents Entitled to It?

Factual Questions
1

I apologize if this has been covered before. A search failed to turn up conclusive results.

When a child (under 18) earns money, are the parents legally entitled to any of it?

For example:
[ul]
[li]A 14-month-old baby appears in a TV commercial for… Husqvarna chainsaws. She earns $15,000 for her work. Does that money belong to the parents? Or does it have to go into a trust fund for her?[/li][li]12 years later, the same child is 13 and appears in a TV commercial for… Geritol. She earns $20,000 for her work. Now, at 13, she has more use for the money than she did at 14 months (you know, CD’s, iPods, clothes, etc.). Is she legally entitled to any of it? Can her parents take it all and blow it? Is there an exception if the parents really need the money (like, say, they’re late on their mortgage or something)?[/li][li]4 years later, the child’s family is flat broke and she’s working at Burger King. Can the parents legally use her money from her job to help with the household finances?[/li][/ul]

I note that Lindsay Lohan’s father is suing for his share of the money Lindsay earned when she was a child :eek: . Does he have any legal standing?

2

Money earned by a child (or, indeed, paid to a child for any reason: settlement of a lawsuit, settlement of relative’s estate, dependent’s pension, etc.) belongs to the child. It is held in trust for the child until the child reaches majority.

This does not mean that the money is inviolate, though. A parent is entitled to use a portion of it for necessary and reasonable expenses involved in the care and upbringing of the child. An allowance may be paid to the child out of the trust’s income.

The parents’ expenses and debts are just that – theirs, to worry about. The child is in no way responsible for them, and his/her money can not be taken to cover them. However, as a dependent of the parents, his or her funds can be used to a reasonable degree to cover household expenses that will benefit the child.

Let’s say that a child is badly bit by a vicious dog at age 4. The settlement pays the child’s medical expenses, including reconstructive surgery, and also sets aside $25,000 in damages for the child’s future. Meanwhile, the parents can only afford a two-bedroom apartment in which the child shares a small room with a same-sex sibling, and has no reasonable place to play outside. The use of a small portion of the child’s trust to supplement the parents’ housing budget to enable them to buy or rent a three-bedroom house with a yard, is a legitimate expenditure of the income from the child’s trust.

But all such drawdowns must be documented and be satisfactory to the trustee and/or the court that they are being properly applied to the benefit of the child.

3

[QUOTE=HeyHomie]
I apologize if this has been covered before. A search failed to turn up conclusive results.
When a child (under 18) earns money, are the parents legally entitled to any of it?
For example:
[ul]
[li]A 14-month-old baby appears in a TV commercial for… Husqvarna chainsaws. She earns $15,000 for her work. Does that money belong to the parents? Or does it have to go into a trust fund for her?[/li][/QUOTE]

I think in the US, maybe California has a law that a minor actor is supposed to have a trust fund set up for their earnings as a minor, where some percentage of the earnings are supposed to be put into the fund, but not all of the income.

However, it does allow for agents fees, attorneys, accountants and other “reasonable expenses”, but as history has shown, parents and other asociates have different definitions of “reasonable expenses”. Ands yes, the minor can have some of the money right now as an allowance or whatever, the kid did technically earn the money.

[QUOTE]
[li]12 years later, the same child is 13 and appears in a TV commercial for… Geritol. She earns $20,000 for her work. Now, at 13, she has more use for the money than she did at 14 months (you know, CD’s, iPods, clothes, etc.). Is she legally entitled to any of it? Can her parents take it all and blow it? Is there an exception if the parents really need the money (like, say, they’re late on their mortgage or something)?[/li][/QUOTE]

If the actor is still a minor, then the trust fund rule still applies. It is up to the parent(s) to decide how much of the money the kid can get out of the rest.

In this case, I think that once you’re of legal age to work in whatever state you’re in, the money is yours to do with what you see fit, I know of no law that says you have to turn it over to yuor parents, you earned the money after all.

He’s probably going to claim “managerial expenses”, ie he drove her back and forth to auditions and jobs, helped her learn lines, etc.

IANAL, nor am I an actor, what I’ve posted above is what I’ve gleaned from the various “I was a child actor” shows on TV and what I’ve read.

The kid actor having this large trust fund when they turn 18 or 21 or whenever is the exception rather than the rule.

Some examples of mismanagement:
Macaulay Culkin, he was basically the sole income earner for the family during the Home Alone movie series, I think his dad spent a lot of Macaulay’s money on various things for the family and kept some for himself.
Dustin Diamond, Screech on Saved by the Bell, his dad spent most of his trust fund money because he could, when Dustin turned of age to get the money, he found out he had a fraction of what he was supposed to have.

I think Bill Cosby said it best:
“Don’t give anyone the authority to sign your checks.”

On preview, I noticed that Polycarp hit the legal points very well.

4

Patty Duke was a victim of this as well – according to her, the couple (not her parents, by the way) that managed her spent her earnings quite freely. She was a Broadway headliner at 12 in The Miracle Worker, and starred in the eponymous TV series for several years, earning a large amount… but when she married at 17 and was legally entitled to collect the monies held in trust for her, there was less than $18,000 in bonds; the rest had been squandered.

5

IIRC I think this question goes back to the 1930s when Jackie Cooper sued his parents for spending the fortune he made as a child star. Cooper was later a grown up star also.

6

Most of the regulations were set by the “Jackie Coogan Law.” Coogan was a very successful child star in silent films (he’s best known now as Uncle Fester in the Addams Family TV show), but when he reached adulthood, the $4 million he earned was in his parents’ hands, and they refused to give it to him. Coogan sued, but couldn’t recover the money, since the law at the time gave parents complete control over any money earned from their children.

The Federal law was passed in 1939 and was revised a few years ago. If a child works in an enterainment field (including sports), 15% of the gross income automatically goes into a trust, and all earnings are the property of the minor.

Looking at a summary of the law, the money in the trust is hard to get at, but the other 85% can be used for anything, so long as the child agrees.

In the example given, the child would have earned a total of $35,000. $5250 would have gone into trust, but the rest could have been used for anything the child wanted.

7

I think this is pushing what you’re allowed to say in GQ. :wink:

8

When Patty’s sons Sean and McKenzie Astin became child actors, she insisted that all their expenses be paid by her and then-husband John Astin. She didn’t use any of the boys’ money for their show biz enpenses.

9

Hell I didn’t even get the last name right
:smiley:

10

So why can’t the kids sue their parents and win? Since the money belonged to the child, how are the parents allowed to spend it?

Look at Gary Coleman, he’s doing commercials for a loaning agency now. Why isn’t he entitled to at least a sum of his money back from his parents?

11

Well, two distinct reasons, one legal and one pragmatic, covering different points in the kid’s life.

  1. He can’t sue his parents while still a child, for the very good reason that as a minor legal actions in his name must be commenced by his parents as his legal guardians.

  2. He won’t sue as an adult due to that well known maxim Non potere calcem exsanguinari.

In the event that the illegal conversion of the child’s income or assets is discoverd in time, the court will often appoint a guardian ad litem, a lawyer charged with ensuring that the child’s interests and his alone are protected. But ordinarily the problem is not dealt with until too late.

12

So what I gather is that if a kid earns money in the entertainment industry, it’s somewhat protected. What about other ways?

I used to have a friend who was hit by a drunk driver when she was a young teen. She spent a year in the hospital, and never was quite right afterwards. From what she told me, she got a pretty big insurance settlement, which her parents promptly took and used to pay for her older brother’s college expenses. By the time she was ready for college, there wasn’t much left. IIRC there wasn’t much she could do about it, either, although the settlement was in her name.

13

As posted by Polycarp

That money was hers and hers only, it was supposed to be held to for her when she turned the age of majority, her brother had no interest or claim to the money.
Sadly, this probably happens more often than not

14

Yeah, I imagine it’s a pretty shitty thing to have to sue your own parents. even if you’re pissed at them for spending your money.