LGBTQIA+ Financial Guide to Becoming a Parent

While the U.S. still has a way to go to achieve LGBTQIA+ equality, some significant strides have been made, particularly when it comes to LGBTQIA+ families. In 2015, the U.S. Supreme Court ruled that same-sex couples have the right to be legally married. According to Census Bureau data, by 2021, there were roughly 710,000 married same-sex couples in the U.S. A pivotal 2020 Supreme Court decision also expanded employment anti-discrimination statutes to include LGBTQIA+ people.

While starting a family can be complicated and expensive for any parent, it's especially true for LGBTQIA+ people. The progress made in LGBTQIA+ civil rights, along with advancements in medical and reproductive health technology, have given LGBTQIA+ people who want to add children to their lives more options than ever. According to a U.S. Census Bureau analysis of Current Population Survey (CPS) data, 15% of the 1.1 million same-sex couples in the United States in 2019 had at least one child under 18 in their household, compared with 37.8% of opposite-sex couples.

Today, LGBTQIA+ 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 LGBTQIA+ 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 a parent 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.

Adopting a child from the public child welfare system typically incurs minimal to no costs, with eligibility for state or federal assistance covering both ongoing financial support and Medicaid for the adopted child. The Federal Adoption Assistance and Child Welfare Act of 1980 facilitates these adoptions by offering financial and medical assistance to reduce barriers and support adoptive families' needs.

Eligible families may receive a one-time reimbursement of up to $2,000 for adoption-related expenses, such as court and attorney fees, with potential tax deductions for expenses exceeding this limit. To qualify for federal adoption assistance, a child must meet specific criteria, including being unable to return to their biological parents and having special needs that make adoption without assistance challenging.

Resources like Child Welfare Information Gateway’s Adoption and Guardianship Assistance by State provide detailed information on state-specific adoption assistance programs, helping families understand eligibility, benefits and application processes.

Adoption through private agencies is more costly than public child welfare system adoptions. The average total cost for adoption via an adoption agency can reach up to around $43,000 before claiming the adoption tax credit. These fees cover home studies, court and legal expenses, counseling for birth parents, medical and legal costs for the birth parent, adoptive parent training, social work services for child-family matching, interim child care and post-placement supervision until the adoption is finalized.

Finalizing the adoption in a U.S. court is a requirement for all domestic adoptions and some intercountry adoptions, with the average documentation fee being $600. Legal fees for adoptive parents can reach up to $4,500, depending on the state and the complexity of terminating parental rights. Whether these expenses are included in the agency’s overall fee varies by state and agency.

Independent adoption, conducted outside the public child welfare system, typically involves legal representation for both prospective adoptive parents and expectant parents. Costs for this adoption route can vary greatly depending on the complexity of the legal procedures and the services of legal consultants, attorneys or facilitators. The total average cost can reach up to $38,000 before claiming the adoption tax credit. These fees often cover a home study, the birth mother’s medical expenses and legal and court fees for both adoptive and birth parents.

Some nonprofit organizations, such as Pact: An Adoption Alliance and The Cradle’s Ardythe and Gale Sayers Center for African American Adoption, offer financial assistance to adoptive families. These organizations focus on matching newborns with families sharing the same racial and cultural background or those prioritizing the adoption of African-American children or children of color.

Intercountry adoption involves fees that can significantly vary by country. These adoptions often incur higher costs than domestic adoptions due to the necessity of foreign travel, immigration processing, court expenses, adoption education and required documentation. For example, the total average cost for adoptions to the U.S. from China can reach up to $36,000, $35,000 from Ukraine and $48,000 from South Korea. These costs are before claiming the adoption tax credit.

The type of organization overseeing the adoption — be it a government entity, private agency, orphanage, nonprofit, attorney, facilitator or a combination thereof — also influences the total costs. While some intercountry adoptions are completed in the child's home country, others require finalization in the United States, especially if a family's state does not recognize the foreign adoption decree. Many parents choose to finalize the adoption in a U.S. court to ensure full legal protections, potentially increasing the overall cost.

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 average total costs can reach up to $2,900, covering home study, document preparation, attorney fees and travel expenses.

Foster-system adoptions depend on state laws and policies. Even in the states that prohibit discrimination based on sexual orientation or identity, LGBTQIA+ adoptive parents may encounter heterosexism 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. The adoption costs for this approach range from $2,000 to $3,000.

Even if you’re married, and both are 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 heritage,” Joyce 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.

Surrogacy is a process in which a woman carries and delivers a baby for another person or couple. There are two types of surrogacy: gestational and traditional.

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 between $60,000 and $150,000, which is prohibitive for most people. Attorney Joyce Kauffman, who specializes in family law, noted, “I’ve certainly known people who have modest incomes who’ve literally remortgaged their homes in order to be able to have a child.”

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.

IVF costs vary by provider, location and insurance coverage. FertilityIQ data indicates that a single IVF cycle costs approximately $23,474, with variations based on the location and included services. On average, patients undergo 2.3 to 2.7 IVF cycles, leading to an average expenditure of about $50,000 on treatment. Annually, total costs typically rise by 10% to 15%, with 5% of this increase attributed to more patients opting for PGS genetic testing.

Whether your insurance covers Assisted Reproductive Technology (ART) depends on where you live and your health plan. As of September 2023, 21 states, along with DC, have enacted fertility insurance coverage laws. Among these, 15 states mandate coverage for IVF and 17 states provide coverage for fertility preservation in cases of iatrogenic (medically-induced) infertility. 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 LGBTQIA+ singles. Many policies discriminate against LGBTQIA+ 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 they became pregnant. Preventive prenatal visits should be free, but copayments, deductibles and co-insurance 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.

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, LGBTQIA+ people must pay the full cost of fertility treatment or surrogacy. The 11 states where 20% of the LGBTQIA+ population lives allow state-licensed child welfare agencies to refuse placement with LGBTQIA+ 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 LGBTQIA+ 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.

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 LGBTQIA+ 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."

Forming a family doesn’t need to break the bank. These six strategies can help you manage the costs of having children

Starting a family can be especially costly for LGBTQIA+ parents, who incur additional legal and medical expenses. Organizations that provide financial assistance to help LGBTQIA+ families include:

• AGC Scholarship Foundation provides financial support for U.S. citizens struggling with infertility.
• BabyQuest Foundation provides financial assistance for couples or individuals under 40 struggling to afford fertility treatments, including IUI, IVF, egg donation and surrogacy.
• Family Equality lists LGBTQIA+-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 LGBTQIA+ 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 LGBTQIA+ families and provides information about financing and cost management options.

We've compiled a list of organizations dedicated to advocacy, legal support and education to support individuals and families within the LGBTQIA+ community in navigating adoption and family rights.

• Equality Federation: Supports state-based advocacy efforts to fight LGBTQIA+ discrimination and advance LGBTQIA+ 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 LGBTQIA+ 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 LGBTQIA+ parents and caregivers.
• National Center for Transgender Equality: Advocates to improve understanding and acceptance of transgender people and fights for transgender parents rights to foster and adopt children.
• Overcoming Housing Discrimination Against LGBTQIA+: Provides information on legal protections for LGBTQIA+ renters, outlines common discriminatory practices and offers resources to help secure inclusive housing and support.