Escrow Security
SeedTrust was established to provide the surrogacy and egg donation industry with a more secure, efficient, and transparent escrow service. By elevating service and security standards, we have become the market leader over the last nine years, providing escrow services to over 20,000 families without issues. When it comes to selecting an escrow provider, there should be no room for compromise; the consequences are too high.
Your Safe & Secure Trusted Escrow Partner
For intended parents, surrogates, and donors, selecting an escrow provider is often an afterthought. This can be a major mistake since an escrow company is highly involved throughout the journey and is a critical partner. It is essential to ensure that the provider is qualified and does not put you or your money at risk.
SeedTrust offers an exemplary model, providing unmatched security, transparency, and expertise. With a highly qualified team of attorneys and CPAs, rigorous internal and external audits, comprehensive insurance coverage, and a robust, transparent system, SeedTrust protects funds and peace of mind for all clients. Our independent operations, stringent protocols, and industry-leading standards effectively mitigate risks, making SeedTrust a trustworthy and reliable escrow service provider.
Qualified and Experienced Team
SeedTrust’s team, including CPAs, attorneys, and financial experts, ensures expert management of over 20,000 surrogacy and egg donation escrow cases.
Defined Structure & Processes
SeedTrust employs a stringent 5-step approval process and advanced security measures across multiple banks to ensure client fund protection and operational continuity.
Independent and Specialized
SeedTrust operates as an unbiased, independent third-party escrow provider, focusing solely on escrow management to maintain objectivity and compliance with agreements.
Bonding and Insurance
SeedTrust’s comprehensive insurance program includes a $50 million bond and various policies, protecting clients against theft, errors, and cyber threats.
Oversight
Our team comprises professionals, including CPAs and attorneys, who uphold fiduciary responsibilities to clients. With our significant bond size, we undergo annual underwriting and audits to ensure minimal risk in our structure, team, processes, and functions. Our internal and external accounting teams, led by CPAs, regularly review and audit our accounts. Additionally, SeedTrust operates through a secure system offering 100% transparency and real-time notifications to clients and agents, ensuring ongoing oversight and clear channels for addressing any issues.
Frequently Asked Questions
Selecting an Escrow Provider for Intended Parents, Surrogates, and Donors
What key elements should clients look for when selecting an escrow provider?
When selecting an escrow provider, clients should at a minimum ensure the following key elements are in place to ensure security of funds and the ability for the provider to execute:
- Qualified and experienced leadership and staff
- Defined structure, processes, systems
- Independent and specialized operations
- Bonded and insured services
- Regular audits to uphold security and reliability standards
What distinguishes SeedTrust from other escrow providers?
SeedTrust was established to set a new higher standard in the surrogacy and egg donation industry by offering more secure, efficient, and transparent escrow services. With over nine years of experience and serving over 20,000 families without issues, SeedTrust has become a market leader. We prioritize qualified leadership, defined processes, independent operations, bonding, insurance, and regular audits to ensure the highest standards of security and reliability.
Why is selecting a secure escrow provider important in the surrogacy and egg donation industry?
Selecting a secure escrow provider is crucial because, as an impartial third party with a fiduciary responsibility, it protects all parties by ensuring funds are available for contractual payments accurately and timely, eliminating the risk of fund loss and errors, and reducing financial stress by providing impartial guidance to intended parents, surrogates, and donors. At SeedTrust, our priority is to ensure our clients can focus on growing their families without worrying about financial uncertainties.
How does SeedTrust mitigate risks for its clients?
SeedTrust mitigates risks through independent operations, stringent protocols with industry-leading standards and bonding. This approach ensures that funds are handled securely and transparently, providing a trustworthy and reliable service for intended parents, surrogates, and donors.
What makes SeedTrust an exemplary escrow provider?
SeedTrust stands out as an exemplary escrow provider due to its unmatched security, transparency, service and expertise. Key features include:
Security
Qualified and Experienced Team:
- Founded and led by a CPA, an attorney, and led by a former bank executive.
- A diverse team of over 50 professionals, including multiple attorneys, CPAs, and MBAs, with extensive experience in surrogacy and egg donation escrow.
Defined Structure, Processes and Systems:
- Robust internal controls and processes with a 5-step approval process for payments.
- Departmental teams with specialized system access and limited authorities based on roles and responsibilities, combined with timely audits by independent accounting teams to ensure robust checks and balances.
- Robust Multi-Bank System and Fraud Protection: Utilizes multiple banks with advanced fraud protection services (positive pay, dual control, multi-factor approvals) and rigorous internal controls, ensuring uninterrupted service and safeguarding client funds against theft and errors.
- Advanced Custom-Built Software: Employs industry-leading software systems with AES-256 encryption, ensuring information security, transparency, and real-time notifications for clients, while maintaining rigorous internal controls and processes to minimize errors and protect funds.
Independent and Specialized:
- Operates as an unbiased third party with no ownership or control over other service providers in the process.
- Focuses solely on the fiduciary responsibility of managing escrow and protecting all parties involved.
- Experienced to guide clients through any escrow issue or complexity.
Bonded and Insured:
- Maintains a $50 million bond, $2 million general liability policy, $1 million errors and omissions policy, and $1 million Cyber Incident Protection policy.
- First in the industry to introduce and operate with a large bond, ensuring comprehensive risk coverage.
Oversight:
- CPA and Attorney Oversight: Multiple licensed CPAs and attorneys with fiduciary responsibility who must maintain compliance with their respective state licensing authorities.
- Detailed annual underwriting and requirements by our eight bonding providers backing SeedTrust with a $50 million bond.
- Regular internal and external audits and checks conducted by CPAs.
- Real-time transparency and notifications through custom-built escrow software providing for client and agency oversight.
Service and Experience:
SeedTrust offers a large, caring, purpose-driven team of experts available to guide clients throughout their journey. The team is multilingual, including English, Spanish, French, German, and Mandarin.
SeedTrust takes on the responsibility and liability to ensure funds are managed in accordance with the contract. The team provides fast and timely approvals and payments, with scheduled payments for key benchmarks such as base compensation.
SeedTrust maintains the best and most user-friendly custom software, offering full transparency and ease of use.
SeedTrust charges one flat fee with a generous refund policy, making them a great partner throughout the journey.
Why is selecting an escrow provider important for intended parents, surrogates, and donors?
Selecting an escrow provider is crucial because the provider is highly involved throughout the surrogacy or egg donation journey. An escrow company is a critical partner in ensuring that funds are managed securely and efficiently. A qualified provider protects all parties from financial risks and ensures the smooth and accurate handling of payments and related transactions. The escrow provider also serves as an intermediary in explaining financial matters allowing the client to focus on more meaningful conversations about the baby.
Understanding the Expertise Behind SeedTrust's Success
How does SeedTrust’s experience benefit their clients?
With extensive experience in all critical business and legal aspects of running an escrow company, our skilled team has successfully managed over 20,000 cases. This track record establishes SeedTrust as the world’s leading expert in surrogacy and egg donation escrow management, providing our clients with unparalleled security, service, guidance and peace of mind.
What qualifications does the SeedTrust team have?
SeedTrust boasts a robust team of professionals led by our founders—a CPA, an attorney, and a former bank executive. Our team includes over 50 experts, such as multiple attorneys, CPAs, and MBAs, all dedicated to securely serving our clients. This diverse group of professionals ensures that every aspect of our operations is managed with the highest level of expertise.
Why is it important for an escrow company handling surrogacy and egg donation to have a highly qualified and experienced team?
The owners and team of an escrow company must be highly qualified and experienced in financial services management. Due to the complexity of surrogacy and egg donation escrow, a diverse team of professionals with exceptional qualifications and licenses in business, finance, accounting, banking, and law is essential. At a minimum, the company should have a full-time CPA and a licensed attorney with experience in surrogacy and egg donation escrow to provide oversight.
Managing these cases involves handling numerous time-sensitive payments and detailed contractual obligations. Therefore, having a highly qualified and experienced team is essential. This ensures meticulous review and appropriate approval of payments, accurate management of funds, implementation of robust internal controls to prevent fraud and errors, and effective dispute resolution. Ultimately, this approach secures client funds and safeguards the interests of all parties involved throughout the entire journey.
Ensuring Security and Integrity in Escrow Management at SeedTrust
What measures does SeedTrust take to protect clients’ data and information?
The infrastructure behind our escrow software prioritizes information security. Our online platform utilizes AES-256 encryption and follows the Health Insurance Portability and Accountability Act (HIPAA) guidelines. This ensures that your valuable data and information are handled with the utmost care.
How does SeedTrust provide transparency and security to their clients?
Our software provides real-time access to all case details and tracking for all transactions, notifying clients immediately via email of any meaningful changes and payments.This transparency reduces the risk of errors and ensures that any unauthorized payment is quickly flagged. In addition, our independent accounting system audits the core escrow operations system against accounting records and bank statements, adding an extra layer of security. All of our bonding and insurance information is located within our portal so our clients have up to date access to our policies.
How does SeedTrust ensure that their systems and protocols cannot be bypassed?
SeedTrust maintains industry-leading software systems and rigorous processes at every step.
For example, if an error is detected by the payment review team, they cannot change it directly; it must be returned to the approving team for review and adjustment.
Every action by the SeedTrust team occurs within our system without exception, ensuring compliance with our strict protocols and full oversight and transparency. Our custom-built escrow software minimizes errors, increases transparency, and ensures that the proper process is followed without exception.
What banking measures does SeedTrust have in place to protect client funds?
SeedTrust uses a robust multi-bank system with close integrations and the highest level of fraud protection, including positive pay, dual control, and multi-factor approvals. We maintain escrow accounts with multiple banks to ensure uninterrupted service in case of a disruption with one bank or account. This setup minimizes the risk of fraud and ensures continuous operations for our clients.
Client funds are held in attorney and CPA managed trust accounts. The client escrow accounts managed by SeedTrust are strictly for client funds and are never combined with other funds or the company’s operating cash. Our services and banking integration allow for the movement of escrow funds exclusively through our designated systems and procedures, ensuring secure movement through a 5-step approval process that cannot be bypassed. At the bank level, separate teammates must upload and submit the file for approval, which requires custom permissions to move money. Our custom banking setup and integrations provide essential protection and security.
How does SeedTrust implement checks and balances for security measures?
At SeedTrust, we ensure the security of our clients’ funds with a rigorous structure and robust internal controls. Our 5-step approval process involves specialized escrow managers, attorneys, an MBA-credentialed payment team, and a CPA-led accounting team. This thorough system of checks and balances makes it extremely difficult for any single person or group of people to misappropriate funds while reducing mistakes. It would take collusion by four-five different people, including owners, from separate teams to steal any escrow money, which would be caught by our audit team within days. This process applies to all employees and owners regarding any movement of escrow funds without exception.
What internal controls should an escrow company have to ensure security?
A proper structure with appropriate checks and balances is essential. All requests and payments should be reviewed, approved, and audited by separate individuals who report to different managers. Multi-user controls and approvals must be in place for any money to be released from the client’s escrow account. It should always take a minimum of 3-4 people to approve and move money from an escrow account to ensure that no single bad actor can transfer funds improperly. In addition, timely auditing by a separate accounting team ensures that potential theft or errors are caught quickly and handled appropriately.
Why is it crucial for an escrow company to have secure operational structures and processes?
Similar to any financial institution, an escrow company must implement secure operational structures, systems, and processes to prevent theft and errors. Without proper internal checks and balances, the risk of mistakes or theft becomes too high. Ensuring these structures are in place is critical for the company’s security and the integrity of its services.
Independence and Role of SeedTrust Escrow Company
How does SeedTrust ensure impartiality and expertise in escrow management?
SeedTrust is an independent third-party escrow company with no ties to any agency, law firm, or clinic. SeedTrust solely focuses on managing escrow and protecting all parties involved, ensuring funds are handled in strict compliance with the agreements. This independence allows the team to confidently and objectively manage cases and guide parties through conflicts, involving attorneys if necessary. This impartiality and expertise position SeedTrust to recommend the best course of action for all parties.
What recent legal development in the industry highlights the importance of independent escrow management?
New York recently passed a surrogacy statute prohibiting agency-managed and attorney-held escrow where the attorney represents one of the parties due to significant conflicts of interest. These types of arrangements should be avoided to ensure unbiased fund management.
What are the risks associated with a client’s attorney or agency managing escrow accounts?
The purpose of an escrow company is to act as an independent third-party neutral, paying out claims or reimbursements according to the written terms of the agreements between the parties. An escrow company should avoid conflicts of interest and not be involved in creating or managing the match. The company and its owners should not have any greater allegiance to any party involved, nor should they have ownership or managerial control over any other providers paid throughout the process. The escrow company’s job is to manage funds in strict compliance with the underlying contracts, which is particularly complex in surrogacy and egg donation agreements.
Conflicts of interest arise if the escrow manager is also an attorney for one of the parties, as they owe loyalty to their client and must follow their client’s instructions, even if it contradicts the written agreement. An independent escrow company can neutrally manage disputes, coordinating with both parties’ attorneys to find a resolution.
One of the core responsibilities of an escrow company is to review receipts and confirm payments by checking documentation against the contract. The risk of bias is too high if the escrow company is managing payments for themselves or others they hire, such as in agency-managed escrows. These arrangements lack proper checks and balances and can lead to conflicts of interest.
Why is surrogacy and egg donation escrow management complex?
Managing escrow for a surrogacy journey is particularly complex, involving over 100 time-sensitive payments to various providers over a multi-year process. Each submitted request must be checked against the journey-specific underlying Gestational Surrogacy Agreement (GSA) and/or agency agreements, along with provided supporting documents. The escrow company must review these agreements and understand the documentation necessary to determine if the payment should be approved per the agreements or if further documentation or approvals are required. Some calculations and documentation, such as lost wages, are complex. The escrow company is also responsible for reviewing the contract and scheduling non-contingent payments like base compensation and insurance. To do this correctly, they must fully understand the contract.
The escrow provider plays a key role in working with all parties throughout the journey to explain the financial provisions when misunderstandings or disagreements arise. The escrow company also needs to navigate disputes fairly to protect all parties. There are many potential issues that can arise throughout a journey, and the escrow manager must be able to manage the complexity and provide guidance no matter the issue. All of this requires specific qualifications and industry-specific expertise to execute well.
Managing an escrow company or any financial institution requires specific expertise and qualifications in business, accounting, banking, and law. This expertise ensures the company is properly run with the necessary structure, systems, insurance, and oversight to keep clients’ funds secure and manage the complex process of surrogacy and egg donation escrow.
What is the fiduciary responsibility of an escrow manager?
The escrow manager has a fiduciary responsibility to manage the funds between the parties in strict compliance with the underlying contracts, ensuring payments are authorized according to the contracts or by obtaining approval from appropriate parties. Ensure that your escrow provider takes on this responsibility in the escrow agreement.
Why is independence important for an escrow company?
An escrow company should be an unbiased third-party without greater allegiance to any party in the underlying agreements. It should not have ownership or managerial control over any other providers paid throughout the process, ensuring impartial management of funds.
Bonding and Insurance in Escrow Companies
What types of insurance and bond coverage does SeedTrust have in place?
At SeedTrust, all funds are insured by our industry-leading bond and insurance program. Our trust accounts are backed by a $50 million bond. Our comprehensive insurance coverage includes a $2 million general liability policy, a $1 million errors and omissions policy, and a $1 million Cyber Incident Protection policy. SeedTrust strives to reduce risk and protect our clients at all costs.
How does cyber security insurance benefit an escrow company?
Cyber Incident Protection insurance is crucial as it protects the company from damages caused by cyber-attacks. This insurance includes a response team to help manage and reduce damages during an attack. A minimum of a $1 million policy is recommended for adequate coverage.
What is an errors and omissions (E&O) policy, and why is it important?
The next critical policy is the errors and omissions (E&O) policy, which all escrow companies should maintain. This policy protects the company and its clients from mistakes that are not theft but human error. We believe an escrow company should maintain a $1 million policy, as it would cover mistakes on more than 10 cases at one time, which is unlikely to occur. Surrogacy and egg donation escrows are complex, involving many payments, and an E&O policy should be in place to protect all parties in the event of a mistake.
What minimum bond coverage should an escrow company have?
Given that the requirements and underwriting ramp up significantly at $10 million in coverage, we believe this should be the minimum policy an escrow company holds. They should not be trusted to hold funds if they cannot afford or qualify for a $10 million bond, or roughly 10 times what any one case could hold. Given that theft or misappropriation of funds is the most common issue with less secure providers, this should be a strict requirement.
Why is it challenging for an escrow company to obtain a bond?
Bonding requires underwriting and strict requirements due to the risk for insurance companies. Insurance companies specialize in evaluating the risk of theft and must back the company with their shareholders’ money if they issue the bond. Therefore, these policies can be hard to obtain, especially if the escrow company does not have the right qualifications, team, structure, and systems in place. Additionally, the policies are very expensive, and escrow companies must be financially secure and willing to pay for them to protect their clients.
What is a bond, and why is it essential for an escrow company?
The most important insurance policy an escrow company can hold is often called a bond. A bond is a crime, employee dishonesty, or theft insurance policy that protects clients’ funds in the event of loss due to theft or misappropriation. This type of policy can be called an employee dishonesty policy, crime policy, bond, or fidelity bond. In this context, the terminology is interchangeable. In the event of theft or misappropriation of funds, this policy will pay out to return the money.
Bonding requires underwriting due to the risk for insurance companies. These policies can also be hard to obtain, especially if the escrow company does not have the right qualifications, team, structure, and systems in place. Additionally, the policies are very expensive, and escrow companies must be financially secure and willing to pay for them to protect their clients. It is crucial that an escrow company acquires and maintains a sizable bond
Why are bonding and insurance important for an escrow company?
Bonding and insurance are critical components that provide a safety net to protect the company, its clients, and its funds in the event of theft, errors, omissions causing loss, or a cyber-attack.
Oversight and Audits in Escrow Companies
How does SeedTrust ensure proper oversight and security?
The SeedTrust team includes CPAs and attorneys with fiduciary responsibilities, ensuring meticulous oversight. Internal and external accounting teams, led by CPAs, regularly review accounts. SeedTrust’s secure system provides 100% transparency and real-time notifications, facilitating continuous oversight and clear channels for issue reporting. Due to our substantial bond size, we undergo detailed annual underwriting and audits. This comprehensive review adds an extra layer of oversight, and our insurance providers back SeedTrust with an industry-leading $50 million bond.
What transparency measures should an escrow company implement?
An escrow company should provide real-time access to account details, including ledgers and transactions, for all parties involved. System transparency and real-time notifications allow intended parents, surrogates, donors, and agencies to promptly identify and address any potential issues.
How do external reviews contribute to an escrow company’s oversight?
Internal and external audits and checks by CPAs are a crucial element of oversight within a system of checks and balances. The accounting teams should be separate from operational and payment teams and lack banking approval authority to ensure independence. Audits should be conducted in a separate accounting system with independent books and reconciliations.This audit process acts as a check to ensure the accuracy and integrity of the escrow accounts.
What internal practices enhance oversight within an escrow company?
Internal practices include regular reconciliation of escrow accounts by separate accounting teams, maintaining independent sets of books, and conducting regular bank reconciliations. These practices help identify and resolve discrepancies promptly.
How does bonding and insurance provide oversight for an escrow company?
The underwriting and requirements set by bonding or insurance companies issuing a bond or theft policy provide crucial due diligence and risk assessment for escrow companies. These requirements, especially for coverage above $10 million, include detailed evaluations of the company’s expertise, ownership, team, financials, structure, systems, processes, and banking. This annual review ensures risk levels remain acceptable, as the insurance company is responsible for covering losses up to the policy amount. Therefore, working with an escrow provider without a bond of more than $10 million is not advisable.
Why is having a CPA on the team important for an escrow company?
CPAs provide financial expertise and knowledge of internal controls. Their knowledge can help design robust internal control systems and processes. They are also governed by state boards, which can discipline them if they violate any public accountancy rules.
What role does a licensed attorney play in the oversight of an escrow company?
A licensed attorney provides legal oversight and fiduciary responsibility. An escrow company in our industry should have a licensed attorney as an owner or full-time employee. If issues arise, parties can file complaints with the state agency, which can investigate and discipline the attorney for any wrongdoing. Disciplinary actions can include additional education, reprimand, suspension, or disbarment, particularly for misappropriation or theft of client funds.
Why is oversight crucial for an escrow company?
An escrow provider must have oversight and regular audits from multiple sources.Oversight from licensed individuals such as CPAs and attorneys is essential to ensure the security and integrity of the escrow process. Without such oversight and the potential for license loss in case of issues, the risk of working with an escrow company is too high.
Follow Us on Social Media for Current News
Seed. Trust. Grow.
Contact us today.