adoption manual 14

Adoption Self Help Manual
Chapter 14 
Adoption Fees and Expenses


The last really important question we have to answer is short and simple. What's this all going to cost?

Let's keep the answer short and simple.

Bottom line figures: On average, expect to spend under $10,000 for a domestic state-sponsored adoption. Expect $20,000 to $70,000 for a domestic agency or domestic private adoption. Expect $15,000 to $40,000 for an international adoption. The expected ranges include bottom line figures and include fees for the government, attorneys, hospitals, agencies, travel, lodging, etc. You may spend less. You certainly can find yourself in situations where you can spend a great deal more.

You would expect an international adoption to be more costly than private intrastate adoption. You would expect it to be more expensive if you have a child placed through a private agency than if you receive you child through a public agency.

Indeed, since public agencies usually receive tax dollars or other subsidies from the government, the cost of adopting through them can be quite modest.

Some states have simplified the legal process greatly, thus reducing further the cost of adopting a child.

In independent adoptions, you can expect to pay all the costs, including medical and hospital expenses for prenatal care, normal delivery, whatever expenses occur if the mother delivers by Caesarian section and added expenses if the child needs special attention.

There may be other costs as well. These can include travel expense, counseling, maternity clothing, lost wages and the cost of maternity home care.

In agency adoptions, there are fees for registration, application and home studies. You must consider, too, the possibility that the baby will be placed into a foster home for a period of time. More than likely, you will be responsible for that cost.

How about attorney fees? Yours, the birth parents and the agency's? There may possibly be post-placement supervision fees, court costs and finalization fees.

An Important Reminder

Read and learn your state law with regard to what fees and charges can and cannot be paid. Most of the time, this will be clearly spelled out so you cannot later tell the court you didn't understand what was going on. Be assured: The courts carefully scrutinize and monitor all money exchanged in an adoption! The court has the final say in what can and cannot be paid.


What You Need to Know

  1. Find out the registration and application fees for starting the adoption process.
  2. What is the fee for a home study or court evaluation? Does this fee include travel expenses, or will those be extra?
  3. Are there any agency fees or intermediary fees to be charged?
  4. Who is responsible for paying any support, guidance and counseling that the birth mother needs? Is there a limit to the amount of this care?
  5. Does the agency fee include any provision for counseling to you and your spouse? Will counseling to you and your spouse be additional?
  6. Will you be billed for all long distance calls made by the agency or intermediary on your behalf?
  7. Are you going to be charged a placement or finder's fee? (Please note: Finder's fees are illegal in many states. Check the law.)
  8. If an update to the home study is required, will there be more cost? If so, what will that be?
  9. What post-placement services will be provided? What will these cost? Is there a post-placement report to be filed? If so, is the fee for that included, or will it be additional? How much additional?
  10. Are there any "contributions" you will be expected to make at any time during the process of your adoption?
  11. In international adoptions, will there be charges for assisting you in the registration process with the foreign agency?
  12. In international adoptions, what will be the costs paid to the foreign country, to the foreign agency, to intermediaries or "facilitators"? Will there be fees for foreign lawyers? Will there be travel costs for you, the birth mother or the child?
  13. Prior to the delivery, who pays for food, shelter, transportation and clothing for the birth mother? If you are the one who must pay, is there a limit on what these expenses are going to be? Will you be furnished proof of the expenses?
  14. Are attorney fees separate? Will the birth mother have her own lawyer? Who pays the fee?
  15. As it relates to medical expenses for the birth mother, will the money you put up be placed in an escrow account?
  16. Whatever the fees are, which ones have to be paid "up front"?
  17. Of the fees paid, what is refundable if the adoption is not completed for any reason? What if you change your mind? What if the birth parents change their minds? What if the baby is not healthy, or is not the type of child you requested?
  18. What funds will be held in escrow? How are you to receive back any money that has not been spent?
  19. What protection or provisions are available to you in case of excessive or unreasonable charges?
  20. Will anyone supervise or make an attempt to have the birth mother placed on Medical Assistance or welfare? Who is going to coordinate payments to doctors, hospitals, and others involved in caring for the birth mother and the baby?

Is There Anything Available to Reduce Your Costs?

The birth mother may qualify for her state of residence Medical Assistance Program. She may have medical insurance of her own.

Check your own insurance policy. It may cover all, or a substantial portion of the medical costs involved for the birth mother and medical bills/hospital bills for the child.

I recently placed a newborn child who had medical complications at birth, a staph infection.

The baby was put into the intensive care unit (ICU) of a local hospital. The child was going to be fine, would recover with no complications or problems. But there were going to be some big bills. The doctors figured the time the baby needed to stay in ICU would cost between $15,000 and $30,000.

I was called by the hospital on a Thursday night, just two days after the baby was born. Since the birth mother had indicated she wanted to continue with the adoption, the hospital needed me to identify an adopting family immediately.

I called the first family on the Active Waiting List and explained the situation to them. They weren't sure about their medical insurance coverage.

Maybe their insurance wouldn't cover any expenses at all. What about pre-existing conditions? Would the insurance carrier say that they would not pay for the baby because the child had a staph infection before the coverage began?

As you can see, there are some complex issues here. Nothing was sure or certain.

Because it was late, the family could not call the insurance company until the next day, Friday. Suppose the insurance company had questions of their own? What if they wanted to check out this business of pre-existing conditions? That would take more time- and the week-end was already here.

For whatever reasons, the hospital would not be able to wait. They had to have an answer immediately.

The first couple told me they were not in a position to pay the medical bills if they did not have the insurance. The just didn't have the money. They decided they would have to pass up the placement.

I called the second family on the Active Waiting List. Same situation. They didn't know what their insurance coverage was. And, like the first couple, they couldn't come up with that kind of money, either.

The third family on the Active Waiting List already knew that not only did they have medical insurance, their coverage also took care of pre-existing conditions. They told me they wanted to accept the placement.

Within eight hours, it was done. They became the family they had dreamed about.

Well, after such a story, you are probably going to run to the drawer where you keep your insurance policies and check to see what you have. If you don't understand the language of your policy, call the insurance carrier and ask them to explain it to you. There are some specific questions you need answered:

  1. Does the policy cover medical and hospital bills of the birth mother (they usually do not)? Are there any exclusions or exceptions?
  2. Will the policy cover expenses for the baby? Any exclusions or exceptions? 
  3. Does coverage for the baby include or exclude pre-existing conditions?
  4. Does coverage for the baby begin at the time of birth? When you take custody? At the finalization of the adoption? When?
  5. IMPORTANT! Make sure to ask your insurance carrier if their coverage is in compliance with the U.S. government's "Omnibus Budget Reconciliation Act of 1993, Subtitle D, Section 609." Note: This Act may require your carrier to cover all medical expense for the child from birth. It may save you several thousands of dollars if you ask just this one question!

Is There Anything Available to Reduce Your Costs?

Yes! But to protect myself, I must throw in a qualifier. Please, on all tax matters, check with your accountant and/or attorney before making any final conclusions.

The first tax credit to check out relates to Federal Tax Law.

The tax laws were amended in 1996 and 2001 to provide tax credits for adopting families. The original rules were part of the Small Business Job Protection Act of 1996. The newest rules are part of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRA) which took effect on January 1, 2002.

Highlights of the Tax Credit:

Adopting parents will be allowed to claim a tax credit for up to $10,000 of "qualified adoption expenses" incurred for any single child after January 1, 2002. The credit is phased out for families with incomes between $150,000 and $190,000. The credit cannot be claimed by families who also receive reimbursements from any State or Federal programs.

Qualified adoption expenses include agency fees, court costs, attorney fees and medical expenses. The credit can be claimed in the year the adoption is made final. The credit will also apply to parents who adopt a foreign child.

A second form of tax relief was created in the Act in the form of adoption assistance programs. This allows an employer to reimburse an employee for up to $10,000 of qualified adoption expenses per child. The reimbursement is not treated as income.

An adopting family may only take advantage of one form of assistance or another. They cannot utilize the tax credit and the tax free reimbursement from an employer.

Each adopting family should consult with their tax advisor for a detailed accounting of the law, for any changes in the law that may arise, and for details in how to claim any adoption-related tax credits.

Adoption Taxpayer Identification Number

An ATIN is an Adoption Taxpayer Identification Number issued by the Internal Revenue Service as a temporary taxpayer identification number for the child in a domestic adoption where the adopting taxpayers do not have and/or are unable to obtain the child's Social Security Number (SSN). The ATIN is to be used by the adopting taxpayers on their federal income tax return to identify the child while final domestic adoption is pending.

Recent tax law changes require that when an adopting family lists a person's name on the federal income tax return, the adopting family must provide a valid identifying number for that person. During the adoption process, the adopting family may not have been able to obtain an existing or a new SSN for the child who may already have been placed in their home. If the adopting family is eligible to claim the child as their dependent, and they do not have the child's SSN, then the adopting family will need to request an ATIN in order to claim the child as a dependent and (if eligible) to claim the child care credit.

To know whether the adopting family qualifies to claim the child's exemption or child care credit for the child, please check with a tax advisor. Additionally, see "Exemptions" and "Credit for Child and Dependent Care Expenses" in the Form 1040 instructions. For further information, the adopting family may order Publication 501 (Exemptions, Standard Deductions and Filing Information) and Publication 503 (Child and Dependent Care Expenses) by calling 1-800-829-3676 (or 1-800-TAX-FORM). The information can also be downloaded from the internet at

Other Tax Breaks

The next place to check out the tax credit is with your state. Most of the states have eliminated their tax provisions for adoption expenses. But there are still a few states that will allow you some consideration. You will have to check. Don't forget about the subsidies available if you adopt a special needs child.

One other avenue you might explore:

Some corporations have begun to provide employee benefits in the form of corporate funded adoptions. Your company may have such a provision. Check with your benefit office.

If you are in the process of setting up a company, think about including such benefits into the employee agreement. Perhaps you can modify an existing agreement to include adoption cost benefits to help others like yourself.


  1. At no time should you do anything which violates any federal or state law.
  2. Do not get involved with anything that could be considered "Black Market"!
  3. Do not allow yourself to be part of anything which has even the slightest appearance of being shady or improper!
  4. Be informed! (Do not rely or depend entirely on anyone)
  5. Don't try to take shortcuts! Or try to bamboozle anybody!
  6. Be determined! Be persistent!!
  7. Never give up, No matter what!

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