Compensation Disbursement in Surrogacy
There are many ways to handle the disbursement of funds from
the Intended Parent(s) to the Surrogate.
Below are the three most common approaches.
Escrow (Industry Standard): An escrow company is contracted to
handle the fund management. With an Escrow Account, the compensation is deposited into an escrow account and the escrow company sends a check to the surrogate at the agreed times. Typically, when working with an agency, the agency is authorized to request the disbursements on behalf of the parents.
(WARNING: DO NOT work with an agency that offers to act as your escrow agent. A party other than your agency should always be involved.)
This is the safest option for all parties.
Pros:
- Guarantees the money is available
- Surrogate and IP do not have to discuss money issues once the contract is decided
- Checks usually arrive on scheduled dates, with very little variation
Cons:
- Can be difficult organizationally if working with reimbursement of receipts rather than a monthly stipend
- Is an added expense (between $1k and $3k to set up, sometimes with additional check writing fees)
- Is another third party to deal
- If there is an issue with the payment, surrogate will still have to discuss the issue with the IP to get it fixed
Joint Checking Account: Surrogate and Intended Parent(s) share
a joint checking account. Intended
Parent(s) fund checking account as agreed upon in the surrogacy contract, and
payments to surrogate are made from this account.
Relative safety for Surrogate, higher risk for Intended
Parent(s)
Pros:
- Surrogate can see what money is deposited and available
- Intended Parents can see/handle exactly what expenses are being paid
- Easy access for Surrogate and Intended Parent(s)
- If the points are agreed to ahead of time, this minimizes the use of reimbursement and receipts (surrogate can use joint debit card to pay for co-pays, vitamins, etc)
Cons:
- Surrogate and Intended Parent(s) have equal access to the money, and either could remove money from the account unauthorized
- If there is a dispute, both parties will need to communicate directly with one another, or a third party such as a mediator, to address the dispute
- This process requires a fair amount of communication between the two parties
- A lot of trust is required of both parties
Intended Parent(s)
pay Surrogate directly:
Intended Parent(s) are solely responsible for payment to the
surrogate. They write checks to
the surrogate directly from their private accounts.
(Heart to Hands does not condone this method of compensation disbursement.)
This is the least safe approach for the Surrogate, and the
safest for the Intended Parent(s).
Pros:
- Easy for Intended Parents to keep track of expenses
- Because Intended Parent(s) issue all checks, there is no ambiguity or questions about what is being paid
- There is little paperwork, or paper trail
- There is no third party
Cons:
- There is no protection of any kind for the surrogate (beyond what it written in the contract)
- Intended Parent(s) have the responsibility of making sure payments are accurate and on time
- If there is a dispute about money, it can be difficult to address
- An incredible amount of trust is required from the Surrogate
