// you’re reading...

Assisted Reproduction

More Thoughts On California’s New Law Regulating Surrogacy Facilitators’ Trust Funds

To follow-up on our earlier post, a few other questions (and observations) have come to mind:

1. Does this law go into effect immediately?

2. If so, does it apply to existing funds currently being held in a surrogacy facilitator’s trust account or only new arrangements?

3. Must the surrogacy facilitator’s fee be deposited into an attorney trust account or escrow account before the agency can request payment for its services?

4. What if the surrogacy facilitator chooses to forego a Fund Management Agreement at the outset of their engagement? Instead, they only enter into such an agreement once the Intended Parents have been matched with a Surrogate and have executed a contract? Or, the surrogacy facilitator elects not to have a Fund Management Agreement entirely and instead is only identified in the Gestational Carrier Agreement between the Intended Parents and their Surrogate as the repository and administrator of the funds. Are they then exempt? If the Legislature was trying to avoid agencies from holding such huge amounts of monies, then certainly they could have crafted much tighter language. Unless I am mistaken, given the current loopholes, agencies could still require their clients to deposit all of the anticipated funds (often times in excess of $100,000.00) into an unsanctioned agency account without, presumably, any violation of this statute.

I am also still fixated on the lengths the Legislature went to ensure independence on the part of the escrow company. Under the new law, a “nonattorney surrogacy facilitator and any of its directors or employees shall not be an agent of any escrow company holding client funds.” Yet the statute does nothing to proscribe an equally troubling conflict of interest that can exist when the attorney is also the agency owner and lawyer for the Intended Parents and/or Surrogate.  Why carve out this exception for attorneys when their vested interest would be no different than the one that would exist if a relative of the surrogacy facilitator operated the licensed, bonded escrow company? Again, I realize I may be overly-cynical, but it seems to me that the lawyers stand to benefit under this new law as it means they will get to charge for new services without any additional safeguards implemented to protect the ultimate beneficiaries of those trust funds.

Please feel free to weigh in with your thoughts….


One comment for “More Thoughts On California’s New Law Regulating Surrogacy Facilitators’ Trust Funds”

  • Mia

    My husband and I are recent first time parents to a wonderful baby boy, born to a Gestational Surrogate.

    After losing our money to Tonya Collins, Surrogenesis and “Michael Charles Trust Company” with our first surrogate journey, we went independently using our lawyer and our surrogate’s lawyer and followed our contract exactly as it was drafted. My husband and I opened up an account specifically used only for our surrogate. We deposited the amount of money into the account on the date as stated in the contract. We sent monthly bank statements to our surrogate showing the balance in the account monthly. My husband and I were in control of OUR money. WE wrote out our monthly compensation checks Directly to our surrogate on time and sometimes a few days earlier than due if there was a holiday.

    This second time surrogate journey going independently has been the Best Experience we could have every imagined.
    We know there will be people who will say it is not a good idea for IP’s to directly pay their surrogate, but in our situation this is what WE decided to do.
    For our next Surrogate journey we are only going to do an independent journey. If the law has changed and we are forced to deposit OUR money into a such called “Bonded Trust Account” we will have ended our second sibling surrogate journey, BUT will always feel Blessed we had the opportunity to have such a Wonderful surrogate and Lawyer’s, who we TRUSTED and who TRUSTED us as Intended Parents, who helped bring our Beautiful Baby Boy into the world.

Visit Us On TwitterVisit Us On FacebookVisit Us On LinkedinCheck Our Feed