One of the biggest concerns for intended parents during surrogacy is ensuring that their funds are safely managed and distributed.
Surrogacy escrow services provide a secure, neutral way to handle payments throughout the surrogacy process, giving both intended parents and the agency peace of mind.
To learn more about how escrow works and how we protect your funds every step of the way, fill out our quick form now. Our surrogacy specialists are ready to help you.
In this article, we’ll explain what surrogacy escrow is, how it works, and the differences between in-house and third-party escrow services.
Third-Party Vs. In-House Surrogacy Escrow Services
Surrogacy escrow services are a financial arrangement that ensures funds are safely managed and distributed during the surrogacy process.
As you progress through your surrogacy journey, your escrow manager will distribute funds based on predetermined milestones established in your contract.
Think of a surrogacy escrow account like a prepaid gift card. You deposit funds into the account, and as your surrogacy agency provides services, the escrow manager releases the funds based on your agreed-upon milestones.
Funds you deposit in escrow are used for all your surrogacy costs, from medical expenses to surrogate compensation.
There are important differences between in-house escrow and third party escrow:
Third-Party Surrogacy Escrow Services
Some surrogacy agencies offer in-house escrow services, which intended parents working with the agency are encouraged or required to use instead of a third party escrow service.
Pros:
- Financial Protection: Funds that are managed by a trusted third-party are often insured for extra protection.
- Neutrality: Completely neutral, as third-party companies are independent.
- Transparency: High transparency as the third-party can independently report on transactions.
Cons:
- Additional Cost: Typically more expensive due to third-party fees, but offers greater protection.
In-House
In-house escrow is an arrangement where the escrow funds are held in accounts owned by the surrogacy agency. The escrow manager is a staff member of the agency. This is often done to save on the costs of hiring an escrow firm.
Pros:
- Lower Cost: Often less expensive because no third-party company is involved.
Cons:
- Conflict of Interest: May lack neutrality since the agency manages the funds.
- Risk of Abuse: Higher risk of misuse or misunderstandings due to the lack of impartial oversight.
- Lack of Oversight: Funds are handled by the agency itself, which may create risks.
Contact us today to learn how we can assist you with budgeting, managing expenses, and securing your funds every step of the way.
Why Surrogacy Escrow Services Are Important
Escrow services protect both parties by ensuring that the surrogate is compensated only after her milestones are met and that intended parents’ funds are not misused.
They also provide clear, documented proof of payments, adding a layer of transparency and accountability.
How Payouts Work in Surrogacy Escrow
Payouts in a surrogacy escrow follow the guidelines laid out in the surrogacy contract. The contract will outline milestones and the funds allotted to cover these.
Once the agency can provide evidence a milestone has been reached and the escrow agent can verify this, payments will be released.
For example, your contract may specify that the surrogate will begin receiving her base compensation payments once a pregnancy is confirmed at her clinic.
How to Establish an Escrow Account for Surrogacy
Establishing an escrow count can be fairly simple, especially when working with an agency.
Many surrogacy agencies already have trusted partnerships with third-party escrow services, ensuring that your funds are managed securely and fairly from the start. Here’s how the process typically works:
- Step 1. Reach Out to a Surrogacy Agency: A reputable agency will have established relationships with third-party escrow companies that specialize in surrogacy. They will ensure that your funds are in safe hands and properly managed.
- Step 2. Review the Surrogacy Contract: Once you choose an agency, you’ll sign a surrogacy contract that outlines all the terms of your arrangement, including milestones and payment schedules.
- Step 3. Fund Your Escrow Account: After the contract is in place, you’ll deposit the necessary funds into the escrow account. Your agency will then be able to draw from the account to cover surrogacy-related expenses as agreed upon in the contract.
- Step 4. The Agency Takes Care of the Rest: The agency will work directly with the escrow company, ensuring that all payments are handled according to the terms set in your contract. You won’t need to worry about managing payments yourself – your agency and the escrow manager will handle it all.
We will set up the accounts for you – the only thing you’ll need to worry about is making sure the surrogacy contract outlines a process you find agreeable.
Surrogacy Escrow with American Surrogacy
At American Surrogacy, we prioritize the safety and security of your escrow funds throughout your surrogacy journey. We work exclusively with trusted third-party escrow companies that are fully independent of our agency, ensuring transparency and neutrality.
Your funds are securely held by a neutral third-party, and disbursements are made only when specific milestones in your surrogacy contract are met.
We understand how important it is to have peace of mind when it comes to your finances.
That’s why our professional team works closely with the escrow company to monitor and protect your funds.
Our experienced staff, including financial experts and contract law professionals, is always available to answer any questions you may have and ensure your funds are handled with the utmost care and integrity.
You can learn more about surrogacy escrow services by contacting a surrogacy specialist today.