Surrogacy Escrow: The Complete Guide
July 24, 2024 by Frank Golden
Embarking on a surrogacy journey as Intended Parents is a significant and complex process that requires careful planning and decision-making. One of the most crucial aspects is selecting a reliable escrow provider. An escrow provider plays a vital role in managing and disbursing funds securely and accurately throughout your surrogacy journey. As a surrogacy agency with extensive experience, here is our complete escrow guide for surrogacy and what Intended Parents should consider when choosing an escrow provider.
What is Escrow in Surrogacy?
Before we dive in, let’s clarify what escrow means in surrogacy. Essentially, escrow involves a provider managing and holding funds for everyone involved—whether that’s you as the Intended Parents, the Surrogate, or the surrogacy agencies. Payments are made according to the terms of your contract, which can last up to two years or even longer. It’s crucial that these transactions are handled promptly and accurately to keep everything running smoothly.
Why is Escrow Important?
Escrow is a crucial part of the surrogacy journey for several reasons. Choosing the right escrow provider can help you avoid financial headaches and reduce the risk of losing funds. A reliable provider ensures that payments are processed correctly and on time, which keeps everyone feeling secure. Ultimately, a trustworthy escrow provider lets you concentrate on the exciting and emotional aspects of welcoming a new member into your family, knowing that your funds are managed safely.
What to Consider When Choosing an Escrow Provider
When selecting an escrow provider, there are two main things to consider: security and expertise. The provider should manage funds securely and accurately, down to the last dollar. Look for providers that have robust security measures in place. You also need to choose an escrow provider with expertise in Assisted Reproductive Technology (ART) escrow management. Their experience and qualifications are crucial for handling the unique complexities of surrogacy finances.
Suggested Requirements for Secure Escrow
Wondering how to determine if an escrow provider is secure and experienced? Here are five key criteria to consider:
#1 Qualified and Experienced Leadership and Staff
When evaluating a provider, it’s crucial to look at the experience and qualifications of their team. Seek professionals with strong backgrounds in business, law, finance, accounting, and banking, specifically with experience in managing ART escrow. Ensure the team includes a full-time licensed attorney and CPA with ART escrow management experience. A well-qualified team is essential for the successful operation of any financial company, giving you confidence that your funds are in good hands.
#2 Defined Structure, Processes, and Systems
A trustworthy provider will have clear structures, processes, and systems in place. Think of it as a solid checks and balances system that prevents rule violations and ensures everything is transparent. This setup also means that if issues arise, such as fraud or a frozen account, the flow of money to the intended recipients won’t be disrupted.
#3 Independent and Specialized
The escrow company should be a completely independent and unbiased third party. Free from ties to agencies, law firms, or clinics. Their sole responsibility is to manage funds impartially according to the contracts. They should act as licensed fiduciaries, dedicated to protecting your money and ensuring everything runs smoothly. It’s crucial they handle any conflicts fairly and neutrally for all parties involved.
#4 Bonded and Insured
Make sure that the provider is bonded and insured. Look for errors and omissions policies, cybersecurity insurance, and general liability policies to protect your funds from mistakes and cyber-attacks.
Additionally, check if they have fidelity bonds, which cover employee crime and dishonesty. While these issues are rare, a reputable provider will have safeguards in place to address and prevent them. A fidelity bond is a strong indicator of a trustworthy provider as it protects you if an employee or owner intentionally steals your funds.
#5 Oversight and Audits
When picking an escrow provider, make sure they have strong oversight from licensed attorneys and CPAs, and conduct regular internal and external audits. This practice helps maintain the security and integrity of your funds. Additionally, check if they are covered by a substantial bond, which reflects their commitment to maintaining robust checks and balances. A large bond also indicates that the likelihood of the bond being needed is low.
While these formal safeguards are crucial, it’s equally important to choose a provider that offers real-time updates. Knowing that safeguards are in place is reassuring, but having full access and transparency about your funds takes it a step further. Real-time updates ensure you are always informed and can track your funds at any moment, providing an extra layer of peace of mind.
Conclusion
Choosing a secure and experienced escrow provider is a crucial part of your surrogacy journey. By keeping these key factors in mind and asking the right questions, you as an Intended Parent can ensure your funds are managed safely and accurately. This allows you to be able to focus on what’s most important—the joys of growing your family.
It is also worth noting that selecting the right escrow provider starts with choosing the right surrogacy agency. A reputable agency will not only guide you through the surrogacy process but also recommend trusted escrow providers they’ve had positive experiences with. To get started on the right foot, focus on finding a surrogacy agency you can trust. If you’re unsure about what to look for in a great surrogacy agency, check out our blog on “Green Flags and Red Flags in Surrogacy Agencies.” It’s a useful resource for identifying trustworthy agencies and setting yourself up for a smoother surrogacy journey.