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How to Nurture and Finance Your Child Performer's Career

The natural tendency of most parents of extremely talented child performers with professional aspirations is to be as supportive in as many ways as possible, including financially. When the child is a minor, it's particularly advisable to accompany that investment with a plan tailored to the expectations of the financing parents and their minor artist.
11/25/2015 05:11pm ET | Updated November 25, 2016
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The natural tendency of most parents of extremely talented child performers with professional aspirations is to be as supportive in as many ways as possible, including financially. When the child is a minor, it's particularly advisable to accompany that investment with a plan tailored to the expectations of the financing parents and their minor artist. A professional career should be regarded as a business, and depending on the age and maturity of the child, a frank conversation between the parents and child about means and goals is a good point of departure. In this regard, a weekly meeting to review progress, finances, and related activities will help keep the enterprise headed in the right direction.

Among other things, parents and child should prepare a budget to achieve their jointly determined goals. If the young artist is a singer, songwriter or musician, the budget should include the costs of lessons, studio time, producers, side musicians, publicity and digital marketing, video production and costs associated with performances and promotion. Expenses associated with actors or dancers also can be considerable: the cost of training, production and travel to auditions and performances can add up. The advice of an industry accountant or business manager can help anticipate less obvious expenses, making the budget more reliable.

Candid communications are paramount. Do the parents expect to be repaid for advancing costs? If the monies are furnished as a loan rather than a gift, terms for repayment should be laid out: When does the principal get repaid? What are the desires and requirements regarding the payment of interest? And what happens if the career does not bring financial success -- which easily could be the case given the fierce competition in the marketplace? In these discussions it is prudent to have the input of the family's accountant or tax advisor.

Another question is whether the child's earnings, if any, will be used to support parents and family. When silent movie child star Jackie Coogan turned 18, he learned that all his money ($68 million) had been spent by his mother. This example of financial abuse and others moved California in 1939 to enact the first legal protection for the earnings of child performers. New York and other states have followed suit to safeguard no less than fifteen percent of the child performer's gross earnings until she enters adulthood.

To avoid misunderstandings, and for tax purposes, the specific terms of a parent-child business relationship should be memorialized in a basic arms-length agreement. This helps avoid the appearance of any impropriety should parents seek to reimburse themselves for out-of-pocket costs from the performer's earnings. Consideration should be given to retaining an independent lawyer to ensure that the child is treated fairly and understands the process if mature enough to do so. Down the road, the lawyer also can affirm the reasonableness of agreements between the child and third parties if court approval of them is ever required.

Some of these steps may seem formal when dealing with a family business but they can prevent discord, leaving parents and child better able to enjoy their experience together. Even when the child's business activities do not generate substantial income, the education may be invaluable.

For more information, contact entertainment attorney, author and proud stage parent Steven Beer, whose book, Your Child's Career in Music and Entertainment: The Prudent Parent's Guide from Start to Stardom, was recently was published by Allworth Press.