Escrow Services For Surrogacy: Why You Need Them and How to Choose the Right One

The need for escrow services isn’t something that most people think about, but it’s one of the most important factors in ensuring that surrogates and intended parents have a safe and secure way to work together and benefit from the experience.

We recommend choosing an experienced, independent third-party fund management service to provide this support. This escrow solution provides the most protection and limits the risk of financial loss, mistakes, unnecessary conflicts of interest, and unnecessary financial stress throughout the journey.

This guide will help you learn what surrogacy escrow is and why it’s crucial to choose the right service provider.

What is Surrogacy Escrow?

It may sound like a complicated legal process if you’re not familiar with what escrow services are, but it’s actually pretty simple. Escrow is a third-party service that helps manage finances between parties involved in an agreement or transaction.

In surrogacy, an independent escrow company acts as a neutral party to ensure that an intended parent’s funds are protected and that surrogates get paid in a timely manner. The escrow company also makes sure that payments are made (or not made) according to the terms of the surrogacy contract.

Is escrow necessary in surrogacy?

Every parent or surrogate should answer yes to that question. It may seem like an unnecessary expense, but an escrow company is an essential element of any healthy surrogacy arrangement. Without one, there’s no way for parents or surrogates to ensure that their funds are handled properly at every step of their journey.

Choosing a surrogacy escrow provider can be intimidating—but once you understand the issues involved, you’ll realize just how important they are in protecting your rights as an intended parent or surrogate.

What are the risks of choosing a bad escrow provider?

Often, choosing an escrow provider is an afterthought; however, escrow is as critical a decision as any other along your journey. The impact of a failed escrow provider can be devastating.

It is not unheard of for an unscrupulous escrow provider to fail to live up to their duties or outright steal client funds. Choosing an escrow company with inadequate bonding, no licensing, inexperienced leadership, or insufficient oversight unnecessarily places your hard-earned money in serious jeopardy.

How to choose the right escrow provider for your surrogacy journey

When you’re dealing with large sums of money, the risks of negligence, misappropriation and improper handling of funds is significant, so choosing an escrow company with a proven track record and proper protection is a must.

We recommend the minimum requirements for an escrow provider:

  • An escrow account held by an industry-experienced and licensed escrow company with a Minimum Bond (crime policy) of $1,000,000 that is managed by an attorney and not controlled by the Agency associated with the journey that has adequate financial checks and balances and controls in place.

It is also essential to ensure that your provider only disburses funds according to your assisted reproduction agreement and escrow management agreement after gathering and reviewing all supporting documentation for every disbursement request.

What additional protections should I look for?

Having an attorney involved in the management or ownership of the company is an excellent way of ensuring that your funds will be appropriately handled. Every decision and action is subjected to the State’s Bar Association scrutiny, regulation, and punishment. Any time a legal contract is interpreted or a dispute needs to be resolved, an attorney should be directly involved or overseeing the process.

Another way to be certain your funds are handled appropriately is to ensure that a CPA or experienced accountant is involved in the day-to-day management or ownership of the escrow company. CPAs are members of their respective State’s Board of Accounting, a licensing body that oversees, investigates, and sanctions CPAs. They are also trained bookkeepers and accountants, which is central to an escrow provider’s primary purpose.

When choosing an escrow account managed by a law firm, the most important thing is to work with an independent law firm – meaning that the same attorney did not handle the contract for either the surrogate or the intended parents.

Other considerations when selecting an escrow service provider

As you can see, you need to consider some crucial factors when selecting an escrow service provider. Here is a list of questions you can ask each escrow provider to see how they stack up:

  • Is your company licensed and bonded? What is your bond amount?
  • Do you review supporting documents and only disburse funds according to the contract?
  • Does your company take financial responsibility for any mistake?
  • How many surrogacy escrow cases have you managed?
  • Do you have an attorney and/or CPA on staff?
  • What is the total cost of managing my surrogacy journey? Are there any additional fees?
  • Can I view my escrow account balance and transactions at any time?
  • Will I be notified when you make a disbursement?

SeedTrust removes the financial worry and risk

  • Experienced and has managed over 10,000 cases
  • Specializes in third-party fertility
  • Independent third-party escrow fund manager with no conflicts of interest
  • Has a $40 million bond that fully protects escrow funds
  • Funds replaced if distributed mistakenly or misappropriated
  • Accepts full liability for all financial matters that go through escrow management
  • Saves money by checking contract language and supporting documentation
  • Checks receipts and supporting documents to ensure they match all requests
  • Checks all requests against legal contract
  • No extra fees for rematches
  • No additional fee after 12 months
  • Has a custom online portal that is available 24/7
  • Has multilingual support staff, contracts, system, and materials
  • Funding options include e-checks, credit cards, and wires
  • CPA, Attorney, and Banker as active staff/stakeholders
  • Dedicated team of Legal Managers that remains the same throughout the journey
  • Has a committed Surrogate Escrow Guide to ensure Surrogates’ onboarding and escrow experience is stress-free throughout the journey

Our flat, all-inclusive fee structure makes things simple. The total fund management cost for an agency-managed surrogacy journey is $1,850, and independent journeys are $2,000. The total fund management cost for an Egg Donation journey is $400. There are no other charges or other costs, ever.

For more information

Escrow is a vital part of any surrogacy or egg donation agreement. Working with a reputable escrow company can ease some of your stress and provide you with peace of mind throughout your journey.

SeedTrust’s dedicated team of experts is available to you at any time. Schedule a chat with one of our ART Escrow Consultants today!