Intended parents
Why your surrogate's money should never sit with your agency
What surrogacy escrow is, why independence matters, how funds flow during a journey, and the simple habits that prevent wire fraud.
· 5 minute read
In a typical journey, intended parents deposit tens of thousands of dollars to cover their surrogate’s compensation and expenses before she begins medications. That money is paid out over the following year. Who holds it in the meantime is one of the most important decisions in the whole process.
What escrow is
An escrow company holds funds on behalf of others and releases them only according to a written agreement. In surrogacy, the escrow company pays the surrogate’s monthly compensation, allowances and reimbursements as the gestational carrier agreement specifies, and returns any balance to the parents at the end.
Why independence matters
When an agency holds surrogate funds itself, or controls the company that does, a single business’s cash-flow problem can put every family’s money at risk. Several agencies have collapsed, and some owners have been prosecuted, after client funds described as held in escrow were used for other purposes.
California law requires non-attorney surrogacy facilitators to use an independent, bonded escrow company or an attorney trust account, and prohibits them from having any financial interest in the escrow holder. New York requires licensed programs to use independent escrow. These are good rules to apply everywhere.
Independence is necessary, not sufficient
An escrow company can fail too. Before you deposit, confirm that it:
- is licensed where licensing is required, and carries a fidelity bond;
- gives you a written fund management agreement;
- gives you your own portal access and a statement for every transaction;
- pays only against the terms of your agreement, with receipts for reimbursements.
Protecting your wires
The most common way families lose money is not agency fraud but email fraud: a criminal impersonates the agency or escrow company and sends “updated” bank details. Confirm every set of wire instructions by telephone, using a number you already have, never one in the email. Treat any urgent request to pay somewhere new as fraudulent until proven otherwise.
