Protecting Your Finances From...Your Parents?
You've finally made it as a musician, junior hockey player, actress, or perhaps a successful entrepreneur. But, unfortunately, your money seems to disappear as fast as you make it. And, sadly, you're not the one spending it. It's your parents. Maybe they've bought a nice house, cars and other fancy gadgets, all out of your paychecks. But, unfortunately, because you are still a teenager, your finances and contracts may still be under the control of your parents. So what should you do?
Taking Care of Business as a Minor
Justin Bieber is one of Canada's most famous - or infamous -- native sons. By the time he was 14, he had already signed his first recording contract and, soon, he was bringing in millions of dollars. Given Bieber's fame, it is surprising that Canada's laws are still very ambiguous when it comes to enforcing contracts with minors. In most provinces, anyone who has contracted with you more than likely went through your parents -- also known, legally, as your tutors. If you believe that the deal your tutors have made on your behalf are not in your best interest, you should:
- Seek legal help. You may be able to have your contracts re-worded so that a percentage of your income is put into a trust for your benefit. If you live in British Columbia and are 15 years of age or younger, you should already be protected by the Employment Standards Act, which requires that a percentage of your income over $2,000 be placed in a trust on your behalf.
- Talk with your parents and see if they will work with you on setting up trusts in your name and then ask them to deposit a percentage of your income into those accounts. Your parents may balk, saying that they've contributed so much to your career that you owe them money towards household expenses. But there is no reason why you shouldn't be entitled to keep at least a portion of your income. By not protecting yourself, you could end up like singer LeAnn Rimes, who has claimed that her father spent $7 million of the earnings she made while she was a minor for his own personal benefit.
Taking it to the Limit
If the situation with your parents is not good, and you believe that you are mature enough to handle living on your own, you may want to seek emancipation from your parents. Why? Because once you are legally emancipated from your parents, you end their tutorship. Some facts about the emancipation process:
- Not all provinces or territories will allow teens to seek legal emancipation.
- If you live in an area where you can seek legal emancipation and it is your desire to do so, you should consult with a family law attorney who can help you through the process.
- Once you are legally emancipated from your parents, they are no longer financially responsible for you. So let's say you are a fledgling musician and your career hits the skids, and then you fall off a stage and are injured. Your parents won't be responsible to pay those bills, but you will be.
- If you are close to 18 years of age, you may want to wait. One you reach the age of 18, you will be legally emancipated anyway and can move out of your parent's home.
If you are truly at your wit's ends with the way your parents have been handling your finances and business relationships, you may need to do something drastic, such as becoming emancipated. However, you should consider your situation carefully before heading down a road that could be very destructive to your relationship with your family.
To learn more about your options in these kinds of situations, be sure to speak with a family lawyer, such as Donald B. Phelps.