Surrogacy escrow services provide a secure, neutral structure for handling all financial payments throughout your journey, giving both you and your surrogate peace of mind.

At American Surrogacy, we offer both n-house accounting services and the option to utilize an independent third-party escrow provider—whichever is the right fit for your unique situation.

In this article, we’ll explain what surrogacy escrow is, how it works, the important differences between in-house and third-party services, and how we ensure your funds are protected every step of the way.

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.

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 process unfolds, 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 accounting services and third-party escrow:

Third-Party Surrogacy Escrow Services

A third-party escrow service is a company independent of the surrogacy agency that specializes in managing and distributing client funds.

Pros:

• Neutrality: Completely independent, ensuring an impartial relationship between the agency, intended parents, and the surrogate.
• Financial Protection: Funds managed by a trusted third-party are often insured, providing an extra layer of protection.
• Transparency: High transparency as the third-party can independently report on all transactions and balances.
• Legal Compliance: Required for surrogacy in some states, ensuring the process meets all regulatory mandates.

Cons:

• Additional Cost: Typically more expensive due to the third-party’s management fees.

In-House aCCOUNTING sERVICES

In-house accounting services, like those offered by our agency, involve a dedicated, on-staff financial team who manage the escrow funds in a secure, segregated account.

The escrow manager is an expert member of the agency’s staff. This is often done to streamline the process and save on external fees.

Pros:

• Lower Cost: Often less expensive because no separate third-party company is involved.
• Streamlined Management: Direct communication between your agency team and the financial manager ensures quicker, more efficient disbursement.
• Agency Oversight: Funds are managed by a professional team you already trust, backed by the agency’s extensive experience in financial management.

Cons:

• Perceived Lack of Neutrality: Since the agency manages the funds, some clients may perceive a lack of impartiality compared to an outside firm.
• State Limitations: This option may not be available in all states due to specific regulatory requirements that mandate the use of an independent third party.

The Right Option for You

• In-House Accounting: Our in-house services offer a cost-effective and highly streamlined process, managed by a professional team intimately familiar with your surrogacy contract.
• Third-Party Escrow: For clients in states where it is required or for those who prefer an independent service, we can connect you with specialized third-party escrow companies.

You can learn more about surrogacy escrow services and start building your financial plan by contacting a surrogacy specialist today.

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 account can be fairly simple, especially when working with a full-service agency.

Because we offer both in-house accounting services and established partnerships with trusted third-party escrow services, we ensure your funds are managed securely and fairly from the very start, regardless of the option you choose.

Here’s how the process typically works:

Step 1. Reach Out to a Surrogacy Agency

A reputable agency will guide you toward the best financial management option for your situation, whether that is our experienced in-house accounting team or a specialized, independent third-party escrow company.

They will ensure that your funds are in safe hands and properly managed according to your state’s requirements.

Step 2. Review the Surrogacy Contract

Once you choose an agency, you’ll finalize and sign a surrogacy contract.

This document outlines all the terms of your arrangement, including the specific milestones and payment schedules that govern when and how funds will be disbursed from the escrow account.

Step 3. Fund Your Escrow Account

After the contract is in place, you’ll deposit the necessary funds into the dedicated escrow account.

Your agency will then be able to work with the escrow manager to draw from the account to cover surrogacy-related expenses, such as surrogate compensation and medical fees, as agreed upon in the contract.

Step 4. The Agency Takes Care of the Rest

The agency will work directly with the escrow manager (whether that’s our internal finance expert or the third-party company), ensuring that all payments are handled precisely according to the terms set in your contract.

We will set up the accounts for you. The only thing you’ll need to focus on is making sure the surrogacy contract outlines a payment process you find agreeable.

You won’t need to worry about the day-to-day management of payments, your agency and the escrow manager will handle it all.

Surrogacy Escrow with American Surrogacy

At American Surrogacy, the safety and security of your escrow funds are paramount.

We empower you to choose the option that best fits your needs and your state’s laws: our expert in-house accounting services or a trusted third-party escrow provider.

Decades of Proven Experience

Our financial management is built on the expertise of our sister agency, American Adoptions, which has decades of experience successfully managing client funds.

This history provides an unparalleled level of financial stability and professionalism.

We Protected Families During the SEAM Breach

We understand the trust you place in us. Our dedication to financial protection was publicly demonstrated when we shielded intended parents’ funds during the 2023 SEAM escrow breach by paying them back from our own internal reserves.

While this was a one-time occurrence, it underscores that our clients’ funds are safe with us and highlights our commitment to ensuring your financial security, regardless of external circumstances.

You can learn more about surrogacy escrow services by contacting a surrogacy specialist today.