Surrogacy Escrow Accounts: What They Are and Why They Matter

Escrow accounts are a vital part of the surrogacy process. For intended parents, surrogacy escrow accounts provide a secure and reliable way to ensure that all surrogacy-related fees are paid promptly. For surrogates, these accounts ensure that their compensation is received in full and on time.

In this blog post, we'll explore what surrogacy escrow accounts are and why they matter for both intended parents and surrogates.

What is a surrogacy escrow account?

A surrogacy escrow account is a special type of financial account that is set up to manage the funds needed during a surrogacy journey. This account is maintained by an escrow fund manager who holds and manages all payments, deposits, and disbursements throughout the surrogacy journey. An escrow fund manager is a neutral third party who will ensure that all payments are made securely and on time.

Funds in the account are used to pay for any costs associated with the surrogacy arrangement, including medical expenses, legal fees, and other expenses. The account also holds funds used to disburse any payments to the surrogate, such as her compensation and reimbursements.

The primary benefit of using a surrogacy escrow account is that it protects both the intended parents and the surrogate. It ensures that all payments will be recorded and accounted for, that all parties involved are treated fairly, and that no funds are misappropriated or misused. Using a surrogacy escrow account is an important safeguard for both sides since it provides a transparent and secure way to manage the financial side of the surrogacy process.

How do surrogacy escrow accounts work?

Surrogacy escrow accounts are managed by an independent, neutral third party called an escrow fund manager. The escrow fund manager is responsible for ensuring that all payments related to the surrogacy arrangement are received and sent to the appropriate parties. The escrow fund manager will collect all the necessary funds and documents from both the intended parents and surrogates and hold them in an escrow account.

The intended parents will typically put a deposit into the account before beginning the surrogacy process. This deposit can cover any fees, expenses, or other costs associated with the surrogacy process. When the surrogate has completed the legal and medical processes and the pregnancy is confirmed, she will receive monthly payments from the escrow account in accordance with the gestational surrogacy agreement, as well as reimbursement for any other costs associated with the pregnancy.

The escrow fund manager uses the funds in the escrow account to pay for medical bills and any other expenses associated with the surrogacy journey. After all payments have been made and all bills have been confirmed paid, the remaining balance in the account is released to the intended parents.

By using a surrogacy escrow account, all parties involved can be assured that payments are secure and that there are no misunderstandings about who is responsible for what payments. In addition, it helps to keep track of expenses and makes sure that everything is done according to plan.

Why are surrogacy escrow accounts important?

Surrogacy escrow accounts are an essential part of the surrogacy process as they provide vital financial security for both the surrogate and the intended parents. These accounts provide a safe and secure way to manage the financial aspect of the surrogacy process by ensuring that all funds are held securely in an account until they are needed. The funds are held in the escrow account and are released when predetermined conditions have been met, such as confirmation of a successful pregnancy, trimester milestones, or birth.

The primary purpose of a surrogacy escrow account is to protect both the surrogate and the intended parents by providing a secure way to manage their finances during the surrogacy process. Surrogates can be assured that all money due to them will be paid on time, while intended parents can rest assured that all money used to cover costs related to the surrogacy journey will be tracked and monitored.

Additionally, it ensures that both parties adhere to their legal obligations as expressed in the gestational surrogacy agreement. Using a surrogacy escrow account ensures that both parties have clear expectations of their rights and responsibilities and a safe place to store their funds during the surrogacy process.

The escrow fund manager ensures that all funds are handled appropriately and that both parties fulfill their obligations. In the event of a dispute or disagreement between the surrogate and intended parents, the escrow fund manager can help to resolve the dispute. This gives the surrogate and intended parents peace of mind that their money is secure and that any disputes will be handled fairly and promptly.

With a surrogacy escrow account, both parties can be confident that all financial transactions related to the process will be tracked and monitored and that any disputes will be resolved equitably.

Who manages the surrogacy escrow account?

The management of a surrogacy escrow account is typically the responsibility of a qualified and experienced third-party professional, known as an escrow fund manager. An escrow fund manager is a trusted professional who handles all financial transactions related to a surrogacy arrangement, ensuring that funds are held safely and securely until the surrogate is ready to receive them.

Escrow fund managers ensure that all parties involved in the surrogacy process comply with the terms of the agreement. In addition, an escrow fund manager can help resolve any disputes or misunderstandings between the intended parents and the surrogate. By entrusting a qualified professional with these important responsibilities, intended parents and surrogates can rest assured that all parties are protected and that funds are secure throughout the surrogacy process.

How to choose an escrow fund manager

Choosing the right escrow fund manager for your surrogacy escrow account is a critical decision. Intended parents should find an escrow agent they feel comfortable with who is trustworthy, dependable, and thoroughly understands the complex surrogacy laws.

When choosing a surrogacy escrow fund manager, selecting an experienced agent specializing in third-party fertility and an independent and neutral third party is important.

The escrow agent should be licensed, bonded, and insured, and they should accept full liability for all financial matters. Be sure they check contract language and supporting documentation before disbursing any payments and that their team includes financial and legal experts.

Finally, it is also important to consider the payment fee structure that the escrow agent offers. Is it transparent? Do they offer a flat fee? Are there any hidden charges?

During the surrogacy process, intended parents will rely heavily on their chosen escrow agent, making it essential for you to feel at ease with their decision. After all, you’ll be depending on them throughout the entire process.

Learn more about the surrogacy process

If you're considering surrogacy as a family-building option, we understand you may have questions about the process. One crucial aspect of surrogacy is the use of a surrogacy escrow account, which protects both intended parents and surrogates.

At Colorado Surrogacy, we have an experienced team of professionals who can guide you through the surrogacy process, including the use of a surrogacy escrow account. Contact us today to learn more and get started on your surrogacy journey.

Blog by SeedTrust:

SeedTrust Escrow is an independent third-party surrogacy escrow company that provides secure, transparent, affordable, and reliable escrow services to Intended Parents, Surrogates, and Egg Donors throughout their collaborative reproductive arrangements. As an attorney-managed escrow provider, we have a legal responsibility to protect the funds we hold in escrow and handle payments and reimbursements according to the contract between Intended Parents and their Surrogates. At SeedTrust, we endeavor to help families grow and reduce the financial stress of the escrow process allowing parents and surrogates to focus on what matters most — building families.