Written by Admin | Feb 20, 2018 6:00:00 AM
CHICAGOLAWBULLETIN.COM TUESDAY, FEBRUARY 20, 2018 ® Volume 164, No. 35 Serving Chicago’s legal community for 163 years Teenage Olympians face different endorsement world A mong the 244 ath- sored by at least 10 brands, in- control their children’s income. letes on Team USA’s cluding Nike, Burton, Toyota, TIME-OUT Beyond the general violability of roster for the Samsung and Oakley. a contract, there are few legal PyeongChang 2018 Although age clearly doesn’t safeguards for high-income earn- Olympic Games are create a barrier for athletes like ing children, like child athletes six 17-year-old teenagers. Al- Chloe in the competition, how and entertainers. though they are not old enough does being underage affect the AMYN. In California, where Chloe is to serve on a jury, they are just endorsement contracts that they SCHILLER from, Coogan’s Law was enacted old enough to represent our are offered? back in the late 1930s, requiring country in one of the largest in- Contract law applies different- 15 percent of the gross earnings ternational events. ly to minors. Generally, contracts of a child actor, athlete or other Amy N. Schiller is an attorney at According to the International entered into by minors are void- performer to be deposited into a Schiller, DuCanto & Fleck LLP where Olympic Committee, there is no able. According to the Illinois trust account solely for the she practices family law with a strong specific age minimum for taking Supreme Court, after attaining focus on property issues and the minor’s benefit that may be ac- part in the Olympic Games. In- majority, a minor has the power complex financial and custody matters cessed when the child reaches stead, each International Sports to either disaffirm or ratify the facing professional athletes and the age of majority. Federation sets its own minimum contract entered into as a minor. entertainers. She can be reached at Coogan’s Law merely creates a age requirement. For example, However, a contract of a minor is aschiller@sdflaw.com. fiduciary relationship between following the International Ski deemed ratified if the minor fails the parent and child over that 15 Federation, snowboarders must to disaffirm it within a reason- Depending on the contract terms, percent of the child’s earned in- be at least 15 to compete and ac- able time after attaining majority. if the contract is disaffirmed by come. To date, only California, cording to the International Ice What this means is that offer- the child, the parent could re- New York, Louisiana and New Hockey Federation, ice hockey ing a contract to an individual main susceptible to liability. Mexico have enacted Coogan- players must be at least age 18 to under the age of 18 comes with Nonetheless, it can be as- type laws. compete. the risk of that person voiding sumed that these minor-aged It can only be hoped for Team This year, men’s figure skater, the contract soon after their 18th athletes, who are reasonably fo- USA’s 17-year-old athletes, their Vincent Zhou, was credited with birthday. This risk could possibly cused on their sport, put their fi- parents have taken proper meas- being Team USA’s youngest at 17 prevent a sponsor from offering nancial future and income ures to manage and save their years old. U.S. men’s snowboard- to contract with a minor given earning potential into the hands children’s earnings. In lieu of a er, Red Gerard, also 17, made that the minor may not eventual- of their parents and their standard, unrestricted cash-type headlines for being the first ly be bound by it. lawyers. account titled in both the par- American to win a gold medal in It could be troublesome to a According to ESPN, when ents’ name and child’s name, it is these Olympics (and for pro- sponsor, or any adult party to a Chloe Kim turns 18 this April, all more beneficial for a trust ac- claiming “holy [expletive]” on contract, that they do not have of her endorsement deals will ex- count or custodial account to be camera). the same power as the other pire, despite the fact that several set up with terms in place to en- U.S. women’s snowboarder, party to disaffirm it. of her sponsors actually sought sure that the child’s income is Chloe Kim, yet another 17-year- On the other hand, sometimes long-term contracts. Apparently, only used for his or her benefit. old, has also already taken home sponsors can cash in on lesser- this is because Chloe’s father An irrevocable custodial ac- a gold medal this year for the known Olympians by making low urged her lawyer to structure count under the Uniform Gifts to halfpipe event. offers for long-term endorsement the contracts so that Chloe could Minors Act or Uniform Trans- These athletes’ sudden contracts before the Olympic make her own financial decisions fers to Minors Act can be set up celebrity status have us wonder- Games begin. These low-risk about endorsements at age 18. at a bank or brokerage firm to ing about their income earning deals could have a high reward In the media, Chloe’s dad is both safeguard a portion of the potentials at such a young age. value to the sponsor if the athlete being praised for this thoughtful child’s money and allow the Most Olympic athletes cannot becomes popular during the decision, but what if Chloe didn’t funds to be invested. earn a living as a direct result of Olympics. achieve the anticipated success The custodian of the account, the Olympic Games because the In this circumstance, if a minor at the 2018 Olympic Games that usually the parent, controls and U.S. Olympic Committee does were locked into long-term deal was expected of her? Could her manages the assets for the child not pay them to compete. and was not educated on his or father have potentially handed beneficiary and withdrawals can Medalists only win prize her contract rights, these almost- her an 18th birthday gift of losing only be made for the child’s bene- money of up to $37,500. The real adults could miss the “reason- all of her endorsement deals? fit. The child then takes full legal money comes from the sponsor- able” time period to void the It is difficult for Olympic ath- control over the account at age ship and endorsement deals that contract after turning 18 and con- letes to sustain and capitalize on 18 or 21, depending on the state individual athletes are offered as sequently lose the right to disaf- their celebrity status. The where the account was opened. a result of their Olympic-related firm it to seek a better deal. Olympics are only every four There are no limits to the con- fame. Even contracting with a years, so these financial deci- tributions made to these ac- Endorsement deals are in- minor’s parent or guardian has sions are especially crucial. counts, but contributions over a evitable for marketable young its complications. Although par- Generally speaking, the parents certain amount each year could athletes that win the gold, like ents can bind their children to a of minor athletes also do not owe trigger gift taxes. Chloe Kim. Even before winning contract for a period longer than an inherent financial fiduciary The moral of the story, even her first gold medal, Chloe went their majority, the child still has duty to their children, yet, just as children should have a good into the Olympic Games spon- the same power to disaffirm it. all parents of minor children, they lawyer and a good accountant. Copyright © 2018 Law Bulletin Media. All rights reserved. Reprinted with permission from Law Bulletin Media.