Using an independent escrow account vs. letting an agency hold funds is becoming more important than ever in the surrogacy landscape.
Recent news has spotlighted serious problems in the surrogacy industry around the handling of funds that Intended Parents use to pay a surrogate for the time and work they are doing to carry a child for them. As an agency owner and someone who used a surrogate to carry her children, what is happening with some agencies holding funds instead of an independent licensed and insured company is a cause for alarm, and reputable agencies and partners are sounding the alarm.
When you enter a surrogacy journey, funds typically are required to be set aside to cover surrogate compensation, medical costs, legal and other related expenses. The funds can be handled in roughly two ways, and in our opinion, the best way to protect yourself and your funds is the first option, and as an agency owner, we believe this should be the standard in the industry.
- Via a third-party, independent escrow account (often managed by a licensed and bonded company)
- Held directly by the agency coordinating your surrogacy (sometimes called “in-house escrow” or agency-managed funds)
If you are working with an agency that says they will hold your funds, you need to consider this very carefully before agreeing to work with the agency OR insist that a third party account is responsible. These third party accounts need to be licensed and bonded, and have full transparency.
Here’s why letting an agency hold your surrogacy money can be risky:
- Conflict of Interest: When the same agency is coordinating the surrogacy and controlling the money, they effectively decide when or if payments get made.
- Lack of Oversight or Regulation: Independent escrow or trust companies are often licensed, bonded, and subject to auditing or professional regulation. Agencies often lack those safeguards.
- Risk of Misuse, Insolvency, or Fraud: Real-world examples show agencies or affiliated escrow operations using client money for operating expenses or worse leading to collapse, misappropriation, or bankruptcy.
- Lack of Transparency: Agencies with in-house escrow may not provide account statements, real-time transaction history, or audits.
When you funnel your surrogacy funds into a properly managed escrow account, you (and your surrogate) get multiple layers of protection:
- Neutral Oversight — the escrow provider isn’t also your matchmaker or coordinator, they serve as a truly neutral third party. Their job is solely to hold and disburse funds in accordance with the contract.
- Regulation, Bonding & Insurance — Licensed escrow companies or attorney-managed trust accounts are often required to follow strict financial practices, including separate accounting, audits, and maintaining insurance.
- Transparency and Traceability — With regular statements, 24/7 access portals, and documented disbursement records, you can track exactly when and how money moves. This visibility helps avoid misunderstandings or misuses.
- Legal & Ethical Compliance — Using a separate escrow account ensures compliance with applicable laws and reduces the risk that funds will be considered agency assets (especially important if an agency becomes insolvent or dissolves).
- Peace of Mind for All Parties — Surrogates, intended parents, even clinics, everyone benefits when money is handled clearly, impartially, and professionally. That helps maintain trust and stability through what can be a long, emotionally intense process.
If you’re starting a surrogacy journey, make sure to vet carefully and ask the right questions before wiring any funds. Here’s a basic checklist:
- Is the money held in a licensed, independent escrow company?
- Will you be wiring directly to the escrow account (not to the agency’s operating account)?
- Do you get regular, detailed statements? Online access? Transaction history you can audit?
- Is the escrow/trust provider bonded and insured? What protections do they have against fraud, insolvency, cyberattacks?
- Is there full transparency on how and when disbursements are made?
Surrogacy is already emotionally, physically, legally complex. Financial mismanagement should not be an added burden. Using a trust or independent escrow gives intended parents and surrogates confidence that money is handled impartially and safely.
It protects the integrity of the family-building process. Especially when large sums (tens or hundreds of thousands of dollars) are involved.
If the recent headlines teach us anything, it’s that “trust” in an agency is not enough, you need structural trust. An independent escrow account ensures that money meant for surrogacy stays protected, dedicated solely to the purpose defined in the contract, and shielded from conflicts of interest or misuse.
For anyone considering surrogacy, whether you’re an intended parent or a surrogate, insisting on an independent escrow account isn’t optional. It’s essential.