In surrogacy, money held in a bonded trust or escrow account ensures security by a neutral third party (not the agency), preventing misuse and guaranteeing funds for the surrogate’s expenses and compensation per contract, with legal requirements in many states mandating this structure for ethical and legal protection, offering transparency and preventing conflicts of interest.
Why It’s Required & How It Works
- Legal Mandate: States like California (Family Code § 7961) require funds to be held in a secured account not held by the surrogacy agency.
- Neutral Third Party: An independent escrow company or attorney holds funds, distributing payments as the contract dictates (for medical bills, compensation, etc.).
- Protection: This protects intended parents by ensuring funds are available and protects surrogates by guaranteeing payment, preventing agencies from mismanaging large sums.
Key Benefits
- Security: Funds are safe from mismanagement or agency failure.
- Transparency: Clear, contract-based disbursements.
- Reduced Conflict: A neutral manager removes financial stress between IPs and surrogates.
What to Look For
- Independent Provider: Choose an escrow service or attorney not owned by the agency.
- Strong Bonding/Insurance: Verify the coverage amount.