An escrow company serves as an independent third party that holds the funds provided by the intended parent(s) and distributes the payments to the surrogate mother during the surrogacy process. The escrow company will pay the surrogate mother in accordance with the written agreement between the parties and therefore will not work in the sole interest of either party.  In the case of surrogacy, having an escrow company handle the payments can help both the intended parents and surrogate mothers feel at ease during the surrogacy process.  

Intended parents are likely to feel more comfortable leaving the financial work to the escrow company because they will be able to focus on preparing for their baby instead of worrying about paying their surrogate mother on time. Additionally, the intended parents will have time to connect with their surrogate mother.

Surrogate mothers can also feel better about having an escrow company handle the money so they don’t have to worry about late payments. Surrogate mothers will have more time to focus on maintaining a healthy pregnancy rather than dealing with the stress that comes with waiting on late payments.

Not only does using an escrow company ensure that the surrogate mother is paid on time, but it can also relieve both parties of some uncomfortable conversations. Money is not an easy thing to talk about and leaving it in the hands of a neutral, experienced third party is helpful in surrogacy cases. If either party ever has a question about a payment or the amount in the escrow account, he/she can contact the escrow agent instead of having to contact the other party.

Under California law, surrogacy agencies or any other non-attorney surrogacy facilitators should direct their clients to deposit funds into an independent escrow company or a trust account maintained by an attorney. There are risks that come along with choosing not to use an escrow company. By choosing not to work with an escrow company, the intended parents are potentially leaving their money in the hands of their surrogacy agency, which is not experienced in holding money in escrow. Additionally, the surrogate mother is at risk if the surrogacy agency is handling payments because the agency is being paid by the intended parents – so it’s possible that the agency will follow the instructions of the intended parents should any issues arise.

If you or someone you know is interested in learning more about surrogacy and/or escrow companies, feel free to contact our office. Our contact information is provided below.

Please note that this article is for informational purposes only, not legal advice and not intended to create an attorney-client relationship.

Tsong Law Group, A.P.C.