Escrow Agencies and What You Need to Know

There are a lot of moving parts involved in the surrogacy process. From the parents-to-be to the surrogate, there are numerous parties involved that have their own stake in the process. For the sake of all sides, clear and concise paperwork is a necessary function that ensures all parties have the information they need when they need it. Beyond the need for access to information and clear contract guidelines, a third-party escrow company is vital to a surrogacy because it eases some of the many emotional burdens facing both parties.

Surrogacy requires a significant financial investment, and multiple payments must be made over the course of the contract agreement. Why deal with the stress, and worry, of setting and following a payment schedule, when a third-party escrow company can help navigate the process without your daily involvement?

What is an Escrow Agency?

Just as you would establish an escrow account for the homeowner’s insurance policy covering your house, with funds distributed to pay for monthly insurance costs, so too should you establish an escrow account for your surrogacy process.

A third-party escrow agency is an independent group (neither the intended parents, surrogate nor the placement agency are affiliated) that holds the funds used for payment during the surrogacy process. The agent in charge of the escrow account pays out funds from the intended parents to the surrogate as laid out in the surrogacy contract.

For intended parents, you can forget about the need to make monthly payments and focus on the bundle of joy coming into this world. As a surrogate, there is no need to worry about intended parents forgetting, or purposely delaying, payments. The intended parents fund the escrow account at the beginning of the process, so the money is there for the agent to disburse as agreed upon.

Benefits of an Escrow Agency

As mentioned above, using a third-party service for your escrow accounts during surrogacy removes a lot of stress for both sides. The parents-to-be can fund the escrow account in advance after terms of a surrogacy contract are agreed upon, and put the financial worries of the process behind them. Surrogates will never have to worry about having the awkward conversation with parents-to-be about bounced checks or late payments.

For both sides, a greater benefit is access to reliable, timely information. When either side has a question about the escrow account, the escrow agent is available to answer the questions of both sides, and if necessary serve as a go-between in the communication process. Most importantly though, you may find that your state actually requires a third-party escrow agency be involved in the process. While some states do not, Illinois is an example of one such state that mandates the involvement of third-party escrow agencies.

Legal Risks Without an Escrow Agency

Surrogacy, like anything in life, comes with a multitude of risks. The United States is one of the few countries in the world with no federal legislation regarding assisted reproductive technology, including surrogacy. This means that a failure to use a third-party escrow agency during surrogacy can expose both parties to legal risks. Among the potential risks:

  • Surrogacy agencies do fold from time to time, and if you’ve paid one in advance and if it folds you could potentially lose your entire investment.
  • You could be charged more than you should for medical expenses. Reputable third-party escrow agencies collect and audit receipts BEFORE making reimbursement payments to a surrogate.
  • Third-party agencies offer independent oversight of surrogacy contracts, ensuring that monies are disbursed precisely according to the agreement both parties made.


Want to learn more about escrow agencies or want to get into contact with one? Head on over to our directory of qualified Escrow Agencies today