- 21-Dec-2024
- Family Law Guides
In most legal systems, children do not have the same legal control over the money they earn during their minor years as adults do, but they do have certain rights to the income they generate. Generally, the earnings made by minors are managed and controlled by their parents or guardians until the child reaches adulthood, but there are some specific legal rights and protections that govern how these earnings are handled.
In many countries, minors have the legal right to earn income through employment or business ventures, although this right is subject to child labor laws that restrict the types of work they can do and the hours they can work.
Example: A 16-year-old may work part-time at a retail store or as a freelancer, depending on the local labor laws, but there may be limitations on the number of hours they can work or the kind of work they can perform (e.g., hazardous jobs).
Even though minors can earn income, the control and management of that income typically belong to the parents or guardians. Parents or guardians are responsible for using the child’s earnings for the child’s care, welfare, and education.
Parents are usually entitled to hold and manage the earnings on behalf of the child until they reach the legal age of majority (usually 18 years old). This control is often viewed as a fiduciary responsibility where parents must act in the best interests of the child.
Example: If a child earns money from a performance or a small business venture, the money may be placed in a bank account under the child’s name but controlled by the parents until the child reaches adulthood.
In certain circumstances, parents or guardians may decide to place a child’s earnings in a trust fund. The money is legally protected and managed by a trustee (often a parent, guardian, or financial institution) until the child comes of age.
Trusts ensure that the money is used properly for the child’s benefit, such as paying for education or healthcare.
Example: A parent might set up a custodial account or special trust to manage the earnings a child has made from an acting job or a product endorsement, ensuring that the funds are used in the child’s best interests until they turn 18 or 21, depending on the terms of the trust.
The rights of minors to work and earn money are subject to child labor laws, which aim to protect children from exploitation. These laws often regulate the type of work children can do and the amount of time they can work.
In most jurisdictions, minors must have parental permission to work. In certain cases, they may need the consent of a government authority (e.g., a school or labor department) to ensure that the work does not interfere with the child’s education or well-being.
Example: A minor working in a restaurant may need a work permit or parental consent, and their employer may be required to adhere to restrictions on work hours.
In some countries, once a minor reaches a certain age (often 16 or 17 years old), they may be able to access their earnings or open a bank account in their own name. However, parental consent may still be required for the child to fully control those funds until they reach the age of majority.
Example: A 17-year-old with a part-time job may have a bank account in their own name, but the parent may still be required to sign off on large withdrawals or investments.
In the case of high-earning minors, such as child actors, musicians, or athletes, there are often special legal protections and financial arrangements to ensure that the earnings are managed properly and do not lead to financial exploitation.
California Child Performer’s Trust: In California, for example, there is a law that requires a certain percentage (usually 15%) of a child performer’s earnings to be placed into a blocked trust account that the child cannot access until they turn 18. This ensures that the child’s earnings are protected and are available for their future use.
Example: A child star who earns a significant amount of money from acting may have a portion of their earnings set aside in a trust, which they can access only after reaching adulthood.
If a minor does not have living parents or legal guardians, a court-appointed guardian may manage the child’s earnings. In such cases, the earnings are still intended for the child’s benefit and are protected by law to ensure they are used for the child’s care and education.
Example: A child who receives an inheritance or earns money from a talent competition may have their finances managed by a court-appointed guardian or conservator until they reach adulthood.
Ownership of Earnings: Legally, the earnings belong to the minor. However, until the child reaches the age of majority, the child’s guardian or parent has the legal duty to manage the money on their behalf. The guardian must ensure that the child’s earnings are used for their well-being and development.
Example: If a child receives money for performing in a commercial, the money is legally theirs, but their parent or guardian will typically manage it until the child turns 18.
If a parent or guardian mismanages or abuses a child’s earnings, the child or other family members can take legal action. Child protection laws ensure that the child’s income is used properly, and in extreme cases, legal intervention can be sought to protect the child’s financial interests.
Example: If a child’s parent spends their earnings irresponsibly or against the child’s interests, the child may be able to seek legal action through child welfare services or a family court.
A child actor, aged 15, earns significant income from acting in a popular TV series. The parents manage the child’s earnings, placing a portion of the money in a trust fund for education and saving the rest for future needs. Under California law, a percentage of the child's earnings (usually 15%) is placed in a blocked trust, ensuring that the child has access to those funds only when they turn 18.
A 16-year-old works part-time at a local coffee shop and earns wages that are paid directly to the child. However, the child’s parent or guardian has the legal right to access and manage the funds, as the child is still under 18 and not considered financially independent.
While children do have legal rights to the money they earn during their minor years, parents or legal guardians generally manage and control these earnings until the child reaches adulthood. Child labor laws, trust funds, and special protections for high-earning minors ensure that the child’s earnings are used responsibly and for their well-being. The exact rights and control over earnings vary depending on the jurisdiction, but children’s earnings are always considered to be held in trust for their benefit, with the parent or guardian acting as a fiduciary until the child reaches the legal age of majority.
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