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….