LGBTQ+ Financial Guide to Becoming a Parent
- LGBTQ+ Family Planning Finance Guide
- Joyce Kauffman
While the U.S. still has a way to go to achieve LGBTQ+ equality, some significant strides have been made, particularly when it comes to LGBTQ+ families.
In 2015, the U.S. Supreme court ruled that same-sex couples have the right to be legally married, and 300,000 same-sex couples have married since then. In a 2020 landmark decision, the court ruled that anti-discrimination laws in employment extend to LGBTQ+ people.
While starting a family can be complicated and expensive for any parent, it's especially true for LGBTQ+ people. The progress made in LGBTQ+ civil rights, along with advancements in medical and reproductive health technology, have given LGBTQ+ people who want to add children to their lives more options than ever. According to the Williams Institute, approximately 125,000 same-sex couples are raising 220,000 children in the U.S.
"LGBTQ+ people have children in all kinds of ways," says attorney Joyce Kauffman, who specializes in family law. Though adding children to your life can be expensive, Kauffman noted, "A lot of people are very creative about it."
The Cost of Becoming Parents for LGBTQ+ People
Today, LGBTQ+ people have many options for forming families, but costs can be a barrier whether you choose adoption, surrogacy or in vitro fertilization. Legal fees, the cost of harvesting donor sperm or eggs, out-of-pocket medical expenses and surrogacy or adoption agency fees make it hard for some LGBTQ+ people to become parents.
While costs can vary widely depending on where you live and what method you choose for building your family, knowing the cost of becoming parents is an essential first step in deciding which route to take.
Adoption is the process of assuming legal rights and responsibilities for non-biological children. There are several different types of adoption, each with different processes, requirements, emotional impacts and costs.
In closed or confidential adoptions, biological and adoptive parents typically have little to no contact or information about each other. Potentially less complicated to navigate, they can be more difficult emotionally for birth parents and adoptive children seeking information down the road.
In open adoptions, adoptive and birth parents know the others' identities and may maintain ongoing relationships. Open adoptions may reduce the stress of unknowns but increase complications of setting appropriate boundaries and building trust between families.
Mediated or semi-open adoptions fall somewhere in between and may include non-identifying contact through a third-party like the adoption agency. This middle ground between no access and unfettered access may also reduce the fulfillment of direct relationships.
Domestic adoptions, whether open or closed, involve adoptive and birth parents living in the United States. State laws and policies govern domestic adoptions.
Most LGBTQ+ families adopt domestically because most countries prohibit LGBTQ+ and same-sex adoptions.
Domestic adoption costs range from $2,000 to $35,000 or more and typically include:
- Court documentation fees: $500–2,000
- Legal fees: $1,500–4,000
- Agency application fee
- Home study fee (for in-depth home visits and interviews to make sure you and your family are ready for the adoption)
- Background checks
- Processing fees
- Travel, even domestic travel, may include transportation and lodging costs
According to a report by Newcastle University, U.S. citizens adopted more than 4,000 children via international adoptions in 2018. International adoptions have declined from nearly 23,000 in 2005.
Agency fees can be lower in international adoptions, but they can take longer and require global travel. Additional fees may apply, including required donations to the child’s country of origin and international travel costs.
Adoptive parents may choose to use public or private agencies, many of which are nonprofit organizations.
Public agency adoption costs range from virtually nothing for foster-to-adoption to approximately $2,000. The costs are low because there are no agency fees.
Private domestic adoptions can cost $20,000 to $35,000 or more because there are agency fees, home studies, legal fees, court costs and other expenses such as background checks and counseling.
In states without protections for LGBTQ+ adoption rights, agencies may refuse to place children with LGBTQ+ families.
An independent adoption occurs outside an agency. Prospective parents must find birth parents themselves or use an agency and a lawyer to secure custody of the child once the adoption is final.
Costs may be lower, in part because some states limit allowable fees or prohibit payments altogether. Still, you should expect to pay for:
- Advertising, if allowed, to find expectant parents. This could cost between $500 and $5,000 or more.
- An agency fee, if applicable, if you use an agency to help you find a birth mother.
- The birth mother’s medical and legal expenses, though some states set limits.
- Your own legal fees.
- Counseling for adoptive and birth parents.
- A home study.
- Court fees for a judge to sign the decree of adoption.
Though independent adoptions may be less costly than private-agency adoptions, this adoption method does not include screening of the birth parents to assess their readiness and commitment to give up their baby. This can cause problems down the road if the birth parents change their minds.
Adopting children from foster care involves either adopting children whose parents' parental rights have been terminated or first fostering a child who is a ward of the state. Either approach is much less costly because fees are low or nonexistent. The costs involved are mainly from the home study, which can range from $1,000 to $5,000.
Adoptive parents can receive federal and state financial assistance that defray transaction costs like the home study and any court or legal fees. State aid may also cover ongoing costs. Amounts vary by state, up to a $2,000 federal limit. States may also provide more assistance to children with special needs or who are considered "hard to place."
Foster-system adoptions depend on state laws and policies. Even in the states that prohibit discrimination based on sexual orientation or identity, LGBTQ+ adoptive parents may encounter homophobia or transphobia that could make adoption more challenging than it should be.
In some jurisdictions, two partners can simultaneously petition to adopt a child, but others prohibit joint adoptions for unmarried or same-sex couples. In such cases, one parent adopts the child and the other completes a second-parent adoption.
Even if you’re married and both named on the child’s birth certificate, it’s safer to go through second-parent adoption. A birth certificate is “evidence, but not proof of parentage,” Kauffman says, leaving parentage open to challenge in some states. Adoption decrees, though, are respected by all jurisdictions.
Second-parent adoption is “not rocket science,” according to Kauffman, and some people may feel they can do it on their own. But it helps if you know what you’re doing. Legal fees vary and typically fall in the $1,000 to $2,000 range.
Not all states allow unmarried couples to do second-parent adoptions, but you can still take steps to prove you are a family, including signing a co-parenting or custody agreement and demonstrating the second parent’s involvement as a parent.
Gestational surrogacy occurs when a fertilized egg from a donor other than the surrogate is implanted through in vitro fertilization (IVF). The egg and the sperm may come from donors or from a biological parent.
A traditional surrogate donates her egg to be fertilized by sperm from a donor or the biological father and implanted using intrauterine insemination (IUI).
Typical surrogacy costs exceed $100,000, which is prohibitive for most people. Joyce Kauffman noted, “I’ve certainly known people who have modest incomes who’ve literally mortgaged themselves, remortgaged their homes, in order to be able to have a child.”
Surrogate compensation: $30,000–$50,000
Unless a family member or close friend is willing to be a surrogate or egg donor without compensation, you can expect to pay the surrogate at least $50,000, more if the pregnancy results in twins or requires cesarean delivery.
Surrogate expenses: $25,000 and up
You might pay for your surrogate’s living expenses and lost wages, which will vary. The surrogate’s health insurance costs typically cost between $10,000 and 25,000 in monthly premiums, copayments, coinsurance and deductibles. Out-of-pocket costs may be high because many providers and aspects of fertility treatment are not fully covered, if at all, by insurers.
Between mental health screening for parents and surrogates and background checks, you can expect to pay approximately $1,500. Additional costs for medical screenings will vary depending on what the IVF clinic recommends.
Legal Fees: $5,000–$12,000
In surrogacy arrangements, you need contracts between all parties: the surrogate, the agency, and the egg donor. Legal fees will vary, but drafting and reviewing contracts might cost $2,500 and $1,000.
To legally establish parentage for both parents, you need a court judgment. This process can cost between $4,000 and $7,000.
Estate planning and establishing trust can range in costs, depending on your lawyer or if you use a lower-cost online option.
Psychological support for intended parents and surrogates, insurance verification, term life insurance and travel costs are some of the other expenses you may encounter.
In Vitro Fertilization
According to the Mayo Clinic, in vitro fertilization (IVF) is considered the most effective form of assisted reproductive technology (ART), and can have a 50% or better success rate. The process entails retrieving eggs from a woman’s ovaries, fertilizing the egg in a lab, and transferring the fertilized egg into a woman’s uterus.
One IVF cycle takes approximately three weeks. The average successful IVF process requires approximately three cycles.
IVF costs depend on provider, location and insurance coverage. The cost per cycle is $15,000 or more; a typical successful process costs $45,000 to $70,000. FertilityIQ predicts the average cost per cycle will reach $25,000 by 2025, including $5,000 for genetic testing, $500–$1000 for annual embryo storage fees and interest rates from financing options.
Artificial insemination is the process of delivering sperm directly to a woman’s cervix or uterus. There are two artificial insemination approaches:
Intrauterine Insemination (IUI): This procedure is performed at a medical facility and involves inserting sperm into the uterine cavity. Success rates range from 5% to 20% in one cycle, depending on the cause of infertility. IUI costs range from $300 to $1,000 per cycle plus the cost of donor sperm, if applicable ($700–$1,000 per vial). Health insurance may cover some of these costs.
Intracervical Insemination (ICI): Sometimes called at-home insemination (though it can be performed at a medical facility) or intravaginal insemination, ICI is a more straightforward process than IUI. Success rates range from 5% to 30% in one cycle. ICI costs less — approximately $200 to $350 per cycle, plus any donor sperm costs.
Financial Assistance for LGBTQ+ Parenthood
Starting a family can be especially costly for LGBTQ+ parents who incur additional legal and medical expenses. Organizations that provide financial assistance to help LGBTQ+ families include:
- AGC Scholarship Foundation provides financial support for U.S. citizens struggling with infertility.
- BabyQuest Foundation gives financial assistance to any couple or individual under age 40 who cannot afford fertility treatments such as IUI, IVF, egg donation, and surrogacy.
- Family Equality lists LGBTQ+-friendly organizations that provide financial help to residents of specific local areas or regions or with specific needs.
- Family Formation Charitable Trust, founded by the Academy of Adoption and Assisted Reproduction Attorneys, provides financial assistance to individuals and organizations seeking to create families through adoption and assisted reproductive technology.
- Gift of Adoption Fund provides up to $10,000 in grants to offset adoption costs. Awards are given without regard to sexual orientation.
- HelpUsAdopt.org provides grants to all types of families, including LGBTQ+ families, to help pay for lawyers and agencies in all kinds of adoptions.
- Human Rights Campaign (HRC) provides information on how to access a range of financial help.
- Journey to Parenthood provides up to $10,000 grants to couples and individuals to cover IVF, IUI, egg donation, surrogacy and adoption.
- Men Having Babies offers the Gay Parenting Assistance Program that facilitates more than $1 million in cash grants each year, discounts and donated services to ease financial burdens of surrogacy.
- National Adoption Foundation Financial Programs offers $500 to $4,000 grants to help prospective parents offset adoption expenses and is open to all legal adoptions.
- Resolve: The National Infertility Association supports family-building journeys, including for LGBTQ+ families, and provides information about financing and cost management options.
Does Health Insurance Pay for Assisted Reproductive Technology (ART)?
Whether your insurance covers Assisted Reproductive Technology (ART) depends on where you live and your health plan. Fourteen states require health insurers to cover infertility diagnosis and treatment, and two require insurers to offer such coverage as an option.
These rules apply to individual and small-group insurance plans and some employer plans. Self-insured employers, who pay medical claims themselves and use an insurer to administer benefits, are typically not subject to them.
ART coverage is typically for people diagnosed with infertility, which does not apply for most same-sex couples or LGBTQ+ singles. Many policies effectively discriminate against LGBTQ+ people.
For example, Arkansas requires couples to prove two years of unexplained fertility, and a husband's sperm must fertilize the patient's egg in order to be covered by insurance.
Conversely, New Jersey specifies that a female without a male partner can access fertility treatment and covers IVF for a surrogate mother.
Employers can offer more generous benefits if they choose, but most don’t. According to a FertilityIQ study, 56% of patients had no insurance coverage for IVF.
Costs associated with egg or sperm donors and surrogate compensation would not be covered by health insurance, but fertility drugs, specialized testing and artificial insemination could be.
The Affordable Care Act established that maternity benefits are essential. Prenatal care, labor and delivery and postpartum care will be covered regardless of who is pregnant or how she got that way. Preventive prenatal visits should be free, but copayments, deductibles and coinsurance will apply to some visits, tests and delivery.
There’s no way around some of these expenses, but you might be able to save money with these strategies:
- Find a known egg or sperm donor who doesn’t require compensation.
- Try at-home insemination; if it works, you’ll save money on your portion of the procedure costs at a facility.
- Find a surrogate mother who has her own health insurance; you’ll still pay her out-of-pocket costs, but you’ll save on premiums.
How Do State Laws Impact Costs of ART?
Laws covering ART, surrogacy, adoption and parentage are set at the state level, and every state is different. Some federal health insurance requirements apply nationwide, but states decide on many specific health insurance rules.
In states that don’t require ART benefits, LGBTQ+ people must pay the full cost of fertility treatment or surrogacy.
The 11 states where 20% of the LGBTQ+ population lives allow state-licensed child welfare agencies to refuse placement with LGBTQ+ people based on religious objections. In these states, adoption may be difficult, if not impossible.
In addition to laws that prohibit discrimination more generally, laws that determine who a parent is — usually found in state paternity statutes — are particularly important in LGBTQ+ family issues.
Some states have made it easier for same-sex couples to establish parentage. For example, in Massachusetts, a lesbian couple can complete an acknowledgment of parentage form at the hospital, be on the birth certificate and be considered legal parents.
Some States Still Lag in LGBTQ+ Parental Rights
There are no guarantees that other states will recognize parentage without legal adoption. Some states are challenging non-biological parents’ rights even if they’re on the birth certificate. The most secure legal protection is adoption. “Once you do that adoption,” Kauffman said, “the parentage cannot be challenged.”
Second-parent adoptions add legal costs but are recognized nationwide. But the Movement Advancement Projects reports that only 44% of the LGBTQ+ population lives in states where they can petition for second-parent status. Alternative approaches like co-parenting or custody agreements also require an attorney.
Kauffman urges her clients to create health care proxies, powers of attorneys and wills. "This is yet another expense gay people have," she said. "Straight people should have these things, too. But for gay people, it's essential to make sure that the people you want to be making these decisions are the ones who get to make (them) and who can visit you in the hospital."
6 Tips to Financially Prepare for Having a Child
Forming a family doesn’t need to break the bank. These five strategies can help you manage the costs of having children:
- Get the financial help to which you’re entitled.
Financial assistance from your state may be available; criteria and amounts vary. If you're adopting, you may qualify for the $14,080 federal adoption tax credit per child and additional federal or state tax credits and ongoing financial help if you adopt a child with special needs. Some pharmaceutical companies offer financial assistance for their fertility drugs.
- Use your employer benefits.
Your employer may offer fertility, adoption or surrogacy benefits like financial support, counseling and paid employee leave. The Dave Thomas Foundation for Adoption recognizes the 100 Best Adoption-Friendly Workplaces based on factors including financial reimbursement and paid leave.
- Get a financial coach.
Adoption financial coaches can help you navigate funding intricacies. Financial advisors or planners can also help you plan, save and manage your family formation expenses.
- Explore financing options.
Fertility financing options exist in the form of loans, low- or no-interest credit, payment plans and flat-fee arrangements. Resources are also available to offset surrogacy costs, from loans and grants to credit and donations from individuals, nonprofits or drug companies. Circle Surrogacy offers a fixed-cost program that includes the professional, gestational carrier, egg donation and insurance fees. While still costly, the program reduces surprise and sets a limit.
- Make a plan.
Once your baby is on the way (if not before), focus on setting up your family’s financial life. Raising a child is estimated to cost more than $200,000, but implementing personal finance strategies can help. Set financial goals, and make a budget and plan for staying on track. Pay down debt and build up any emergency savings you can. It’s even more critical to have an estate plan to protect your growing family.
- Active-duty military members or veterans should understand their benefits.
You may be entitled to adoption benefits, including a one-time reimbursement of up to $2,000, for adoption costs and disability benefits if your child qualifies. You may also be eligible for free fertility products from Heart for Heroes if you're on active duty or a veteran without insurance coverage for IVF medication.
Expert Advice on LGBTQ+ Family Planning
Joyce Kauffman is an attorney with Kauffman Law & Mediation in Massachusetts. She specializes in adoption, guardianship, reproductive technology, divorce and mediation, focusing on issues impacting the LGBTQ+ community. Kauffman has consistently been recognized as a top lawyer by Boston Magazine, Best Lawyers in America and Massachusetts Lawyers Weekly, who named her "Lawyer of the Year" in 2009. She is president of the GLAD board of directors, a member of the National Center for Lesbian Rights' National Family Law Advisory Council and a member of the Family Equality Emeritus Board.
Kauffman earned her J.D. from Northeastern University School of Law, an M.Ed. in counseling psychology from Lesley University and a B.S. in child development from the University of Massachusetts at Amherst. She has written for the New York Times, the Boston Globe and Bay Windows on the importance of securing legal protections for LGBT families.
How to Support LGBTQ+ Families
Allies can learn about the discrimination and hurdles facing LGBTQ+ people. Learn the policies in your state. If you don’t like them, get passionate and advocate for change.
Support LGBTQ+-friendly Companies and Candidates
Vote for candidates who support LGBTQ+ equality. Vote with your wallet by supporting companies that create inclusive, equitable workplaces.
Donate to LGBTQ+ Advocacy Organizations
"Many organizations are fighting every day to protect the rights we have and expand the rights that we don't yet have," said Kauffman. Consider supporting these organizations.
- Equality Federation: Supports state-based advocacy efforts to fight LGBTQ+ discrimination and advance LGBTQ+ equality in state policies.
- GLBTQ Legal Advocates & Defenders (GLAD): Uses litigation, public policy advocacy and education to eliminate discrimination based on gender identity and expression, HIV status and sexual orientation.
- The National Center for Lesbian Rights (NLCR): Works to advance LGBTQ+ civil and human rights through litigation, legislation, policy and education.
- Adoptive and Foster Family Coalition of New York: Advocates to improve and expand services for foster and adopted children and families.
- Children of Lesbian and Gays Everywhere (COLAGE): Provides peer support for people with LGBTQ+ parents and caregivers.
- Family Equality Council: Advocates to advance legal and lived equality for LGBTQ+ families and those who wish to start them.
- Men Having Babies: Provides education, information and peer support for gay prospective parents and provides financial assistance for surrogacy.
- National Center for Transgender Equality: Advocates to improve understanding and acceptance of transgender people and fights for transgender parents face rights to foster and adopt children.
About the Author
Deb Gordon is author of “The Health Care Consumer’s Manifesto (Praeger 2020),” a book about shopping for health care based on consumer research she conducted as a senior fellow in the Harvard Kennedy School’s Mossavar-Rahmani Center for Business and Government between 2017 and 2019. Her research and writing have been published in JAMA Network Open, the Harvard Business Review blog, USA Today, RealClear Politics, TheHill and Managed Care Magazine. Deb previously held health care executive roles in health insurance and health care technology services. Deb is an Aspen Institute Health Innovators Fellow and an Eisenhower Fellow, for which she traveled to Australia, New Zealand and Singapore to explore the role of consumers in high-performing health systems. She was a 2011 Boston Business Journal 40-under-40 honoree and a volunteer in MIT’s Delta V start-up accelerator, the Fierce Healthcare Innovation Awards and in various mentorship programs. She earned a B.A. in bioethics from Brown University and an MBA with distinction from Harvard Business School.
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