Prep for baking. Preheat oven to 350 degrees with the rack in center. Prepare 2 cupcake trays with paper liners.
Mix wet ingredients with sugar. Cream butter in an electric mixer on medium speed until fluffy, about 2 minutes. Slowly add the sugar and beat 3-4 minutes more, until fluffy and light in color. Add egg yolks, one at a time, blending well after each addition and scraping down the sides as needed. Add the vanilla and mix.
Add dry ingredients. Mix flour, baking powder, and salt in a separate large mixing bowl. Add to the butter/ sugar mixture a cup at a time, with the mixer on low, pouring in the milk slowly after each addition.
Beat and add egg white. Beat egg whites with a handheld electric mixer in a medium bowl until soft peaks form, mix into cake batter by hand with a rubber spatula until just blended. Spoon cake batter into cupcake tin with a cookie scoop or spoon.
Bake. Bake for 18-22 minutes, switching the tins halfway, until a cake tester comes out clean. Cool on wire rack completely before filling and frosting.
Make the frosting. Beat cream cheese and butter until fluffy. Add the vanilla and mix. Pour powdered sugar in slowly, beating on low.
Fill cupcakes. Pipe lemon curd into cupcakes or remove a small amount of cake and spoon the lemon curd.
Frost and add coconut. Frost with cream cheese frosting. and roll the cupcakes into a plate of coconut. Serve immediately, or refrigerate up to 1 day.