Surrogacy agreements are often approached with a focus on the emotional and medical journey ahead, but in practice, it’s the financial terms that tend to cause the most strain when they aren’t clearly defined from the start. A strong agreement doesn’t just outline what will be paid—it explains how, when, and under what circumstances those payments apply. Without that level of clarity, even well-intentioned arrangements can break down.
One of the first areas that needs to be clearly addressed is the distinction between base compensation and reimbursements. Base compensation is typically a fixed amount paid to the surrogate over time, often in installments tied to milestones in the pregnancy. Reimbursements, however, are variable and tied to actual expenses—things like medical costs, travel, maternity clothing, childcare, or lost wages. When these categories are not carefully defined, disputes tend to arise over what qualifies as reimbursable, whether there are limits, and how quickly those expenses must be repaid. The more specific the agreement is on these points, the less room there is for misunderstanding.
Medical decision-making is another area where financial terms and legal expectations intersect. While a surrogate always maintains control over her own body, agreements typically address how major medical decisions will be approached and communicated. Situations involving selective reduction, termination, or emergency medical care are not just medical issues—they often carry financial implications as well. If expectations around communication, consent, and responsibility are unclear, these moments can become significantly more complicated than they need to be.
Insurance is frequently assumed to be straightforward, but it rarely is. Not all health insurance policies cover surrogacy-related care, and even when they do, there can be gaps in coverage that create unexpected costs. A well-drafted agreement should clearly identify which insurance policy will apply, whether a supplemental policy is required, and who is responsible for premiums, deductibles, and any out-of-pocket expenses. Without that level of coordination, intended parents and surrogates can find themselves facing financial exposure that no one anticipated.
Even with careful planning, surrogacy can involve unexpected medical scenarios. Complications such as bed rest, cesarean delivery, or extended recovery periods can affect a surrogate’s ability to work and increase both medical and non-medical expenses. There are also situations where a transfer is unsuccessful or a pregnancy does not progress as expected. Agreements that thoughtfully address these possibilities—without assuming the worst—help ensure that both parties understand how those scenarios will be handled financially if they arise.
The structure of the escrow account is another critical component that often doesn’t get enough attention. In most arrangements, funds are placed with a neutral third party who manages disbursements according to the terms of the agreement. This process is designed to create transparency and consistency, but only if the details are clearly defined. The agreement should specify how much funding is required upfront, how payments are scheduled, and what happens if additional funds are needed. When escrow terms are vague, delays and disputes can follow, even when everyone is acting in good faith.
Ultimately, vague financial language creates more than just logistical problems—it creates tension in a process that already requires a high level of trust. Surrogacy agreements are meant to provide structure and clarity so that both intended parents and surrogates can move forward with confidence. When financial expectations are not fully aligned, even small issues can escalate into larger conflicts over time.
The goal is not to anticipate every possible outcome, but to ensure that no one is left guessing if circumstances change. Clear financial terms allow everyone involved to focus on the journey itself, rather than navigating avoidable misunderstandings along the way.
If you’re entering into a surrogacy arrangement, the financial terms of your agreement deserve careful, experienced attention. At Shulman Family Law Group, we work with intended parents and surrogates to create agreements that are clear, thorough, and designed to prevent conflict before it starts: Schedule a Consultation.