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Surrogacy in New York. What you Need to Know Now!

February 2, 2021 | By:

UPDATE

February 2021

Part I

In just a couple of weeks compensated surrogacy will be legal in New York!

I don’t know if you heard, but The Child Parent Security Act (the “CPSA”) was passed by the New York legislature last year and signed into law by Governor Andrew Cuomo.  The CPSA goes into effect on February 15th, 2021 and it makes compensated surrogacy legal in New York!

For those of us who needed third-party assisted reproduction to build their families, and for those of us who practice assisted reproduction law, the CPSA marks an historic change in New York law.  The CPSA brings New York law with respect to third-party assisted reproduction into the 21st Century (along with literally almost every other state in our country).

Unfortunately, there is a lot of confusion among surrogacy agencies, IVF clinics, and even attorneys about the CPSA.  A lot of misinformation is being circulated about the CPSA and as a result it’s getting a bad rap.  I would like to take a few moments to clarify some stuff because I think a lot of people are being incorrectly advised against entering into a surrogacy arrangement in New York.  In fact, during a recent Continuing Legal Education Seminar I attended about the CPSA, a New York State Judge made a really great point about the benefits of the CPSA that reassured me about being able to protect my client’s rights under New York law.

The Judge said that, as compared to an adoption proceeding which seeks to establish a legal parent-child relationship where none exists, the CPSA confirms a legal parent-child relationship that already exists.  Take a moment and wrap your brain around that for a second.  New York just went from criminalizing compensated surrogacy to assuming that a properly arranged surrogacy arrangement that complies with the CPSA, presumes that the intended parents are the legal parents of the baby being carried by the gestational surrogate.  Wow!

If the parties to the surrogacy arrangement cross all their “t’s” and dot all their “i’s” and present a petition for parentage that shows that they are in “substantial compliance” with the CPSA, a judge in New York doesn’t have any purview or authority to do anything other than sign a Judgment of Parentage (even as early as the first trimester of a surrogate’s pregnancy! Although I personally wouldn’t advise my clients to file the petition until the second trimester of pregnancy because I am superstitious[1]).  As an attorney who is used to having to argue with judges over the legality of compassionate surrogacy and parental rights under New York law, and as an infertile woman who was forced to make decisions about how she was going to build her family because of the former prohibition against surrogacy in New York, this is music to my ears!  I can hear Frank Sinatra singing it now:

Start Spreading the News

I’m Leaving [for the clinic] Today

I Want to Be a Part of It

New York New York!

 

So, let’s take a dive into the CPSA and straighten-out some of the confusion!

One of the great features of the CPSA is that it contains the first ever “Surrogate Bill of Rights”.  The CPSA is the first statute in this country that codifies certain aspects of surrogacy arrangements and require that they be respected for the benefit and safety of gestational surrogates.  The Surrogate Bill of Rights is designed to ensure that surrogates in New York are not taken advantage of and are protected both physically, emotionally and financially.  I love the idea of the Surrogate Bill of Rights.  But I think it is the Surrogate Bill of Rights that might be confusing people and making them think New York remains a surrogacy unfriendly state.

Remember I said that the Surrogate Bill of Rights codifies certain aspects of surrogacy arrangements?  These aspects of surrogacy arrangements weren’t created for the first time in the CPSA.  Rather, the Surrogate Bill of Rights takes existing legal concepts that are addressed in almost all gestational surrogacy agreements, and instead of leaving it up to smart lawyers and surrogacy agencies to address these concepts in the gestational surrogacy agreement, the CPSA requires that we do it so nothing slips through the cracks.  While the Surrogate Bill of Rights is groundbreaking in terms of the fact that it is required by New York State law, the rights enumerated in it are nothing new or different to surrogacy or Assisted Reproductive Technology (ART) law.

The Surrogate Bill of Rights guarantees (among other things) that surrogates be provided independent legal counsel, medical and psychological counseling, life and health insurance, and the right to make decisions that affect her health and well-being.  As an experienced ART attorney, I can tell you there is nothing new about any of this.  I think one thing that may be concerning people unfamiliar with ART law is that under the Surrogate Bill of Rights, the surrogate has sole decision-making authority when it comes to her body and management of the pregnancy.  This type of decision-making authority sounds kind of frightening if you are an intended parent.[2]  However, it is important to note that this concept already is addressed in almost all gestational surrogacy agreements written in the United States.

I recently heard that a clinic is advising intended parents not to undergo surrogacy in New York because the CPSA gives the surrogate the right to terminate a pregnancy.  I am guessing this issue originates in part of the Surrogate Bill of Rights that addresses the surrogate’s right to make decisions about her healthcare.  I have news for you folks.  All surrogates have the exclusive right to choose to terminate a pregnancy or refuse to terminate a pregnancy.  United States Constitutional Law requires that a woman have the right to make this decision for herself and her body, even if she’s carrying someone else’s baby.  This is nothing new in ART law.

The Surrogate Bill of Rights just makes sure everyone addresses this in the gestational surrogacy agreement and that all parties to the surrogacy agreement understand that it is her body and she has the legal right to make medical decisions with respect to her body. When this is addressed and discussed up front in the gestational surrogacy agreement, problems later on during the surrogacy journey can be avoided.  The fact that the CPSA mandates that this be included in surrogacy contracts, is doing nothing other than that which best practices in ART law already embraces.  Again, nothing new here folks.

Other concerns have been raised about who can enter into a surrogacy arrangement in New York, and some people are upset that the CPSA has some arguably restrictive language about who can enter into a surrogacy arrangement in New York.  But let’s take a look at this for a moment before we decide that New York remains a surrogacy-unfriendly jurisdiction.  The CPSA requires that:

  • The Surrogate be at least 21 years of age and a lawful permanent resident of New York; and,
  • At least one intended parent must be a legal resident of the State of New York for at least 6 months prior to execution of the surrogacy agreement; and,
  • All parties to the surrogacy agreement must be United States Citizens or lawful residents of the United States.

Okay, yes, it is kind of a big bummer that internationally-based intended parents cannot enter into a surrogacy arrangement in New York absent one of them having a legal residence in New York and some form of lawful basis for residing in the United States and New York for at least six months (Visa anyone?).  At present surrogacy is limited to arrangements between lawful residents of the United States who have a legal residence in New York.

While that doesn’t necessarily negatively impact intended parents who reside in New York, it does impact New York surrogates who might like to carry a child for intended parents who live somewhere other than New York.  I have heard that people are being told that the CPSA only permits surrogacy arrangements between New York residents and prohibits all out-of-state residents from entering into a surrogacy arrangement with a New York surrogate under New York law.

Let me bust this myth open as well.

The CPSA does not prohibit a New York surrogate from carrying a baby for an out-of-state intended parents.  She absolutely can.  What might get a little complicated, however, is how parental rights are established in this type of situation.  Establishing parental rights in this scenario is not going to be as easy as the Judge described it in my CLE seminar, but it can be done.  If you have experienced ART attorneys in New York working with you (and one in the state in which the intended parents reside), the intended parents will be established as the legal parents of the baby the surrogate carried.  The CPSA does provide for the establishment of parental rights in surrogacy arrangements that do not “substantially” comply with the CPSA.

In our scenario with out-of-state intended parents working with New York surrogates, parentage will be established based on the intent of the parties at the time the surrogacy agreement is entered into and the best interests of the child.  These two standards, intent and best interests, are fundamental principles of ART law.  Indeed, there is ample case law (law made by judges as opposed to by statute) in New York and around the country that says the intent of the parties as expressed in a contract or other writing entered into prior to the time the child is conceived through third-party assisted reproduction, will be enforced.  Thus, if you enter into a gestational surrogacy agreement and clearly express everyone’s intent that the intended parents are the parents and that the surrogate and her spouse or partner don’t want to be the parents, then under New York law, the court must enforce the parties’ intent as expressed in the gestational surrogacy agreement and determine that the intended parents are the baby’s legal parents.  Assuming that the surrogate is not contesting parentage and there are no scary facts that would indicate the child would be unsafe[3] growing up with his/her parents, then the judge should issue a Judgment of Parentage notwithstanding the fact that the intended parents aren’t New York residents and the gestational surrogacy agreement is not in substantial compliance with the CPSA.

Quite honestly, establishing parental rights for out-of-state intended parents happens all the time in surrogacy arrangements.  It is really rare for all parties to a surrogacy arrangement to reside in the same state.  Sometimes that means it is a more complicated process to establish parental rights (as is the case here), but at the end of the day parental rights are established.  In ART law, everything is state specific.  In fact, sometimes it is not just state specific but county and judge specific within the state!  Despite the annoying residency provisions, at least the CPSA provides clear guidance on how you establish parental rights when there isn’t substantial compliance with the statute.  And that is a big step-up from those states in which you literally don’t know what you’re going to have to do in order to establish your parental rights until you know what judge has been assigned to your petition.  I will take my chances with out-of-state intended parents under the CPSA any day compared with the insecurity of not knowing how it’s all going to play out until you have a judge assigned in a specific court in a specific county (talk about nail biting)!

So, I hope we have busted a couple of big myths about the CPSA and this unfortunate and unfounded idea that surrogacy in New York is something to avoid.  There are other issues with the CPSA that I will address in Part II of this blog (like insurance, agency licensure, and escrow management) but for the moment I think we made some headway in redressing these horrible allegations about the CPSA and New York surrogacy law.

And for what it is worth, there is a group of New York attorneys, NYAAFF (New York Attorneys for Adoption and Family Formation), of which I am a member, who are working on a “clean-up” bill which seeks to resolve some of the concerns people have about the CPSA, like that pesky little residency requirement.  I have tremendous faith in NYAAFF (heck, the CPSA wouldn’t exist without some of its members!) and I am optimistic that the residency requirement will be modified at some point in the near future.[4]

But even if the CPSA stays exactly as it is today, we’ve come a long, long way.  This is truly an historic moment in New York.  Don’t be afraid of it.  Embrace it!

I’ll Make a Brand New Start in Old New York

If I Can Make it There

I’ll Make it Anywhere

It’s Up to You

New York New York

 

[1] No matter when you file the petition, the Judgment of Parentage doesn’t become effective until the moment of birth.

[2] For purposes of this blog, I frequently refer to intended parents in the plural, as in a couple (whether heterosexual or same-sex, married or unmarried).  Please note that the CPSA also provides for the establishment of parental rights for single parents, not just two-parent families.

[3] An examination of the “best interests” of the child looks to many aspects of parentage and the family situation, the prospective safety of the child is just one example cited for purposes of this blog.

[4] To be clear, the citizenship part of the residency requirement is not among the issues being discussed in the clean-up bill.

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Workin’ 9-5 With an Escrow Agent

July 8, 2020 | By:

My good friends at Private Label Surrogacy recently asked me to help educate their prospective clients and gestational carriers about escrow agents.  What is it that escrow agents do and why is it important? 

Trust me that you don’t really want me to tell you the specific ins and outs of my day at Stork Escrow unless you want to fall asleep from boredom in the next few minutes.  My life as an escrow agent “workin’ 9-5, what a way to make a livin’” (as Dolly sings it), is not the subject of this blog, nor should it be the subject of any blog because “it’s enough to drive you crazy if you let it”. 

Fortunately for those reading this blog, it turns out the question was more general than asking about the specifics of what I do while I’m ‘waitin’ for the day my ship’ll come in.”  Among other questions (which I will address in another part of this blog series), my friends at PLS wanted to know what the difference is between fund managers and escrow agents and when and why you need to hire one of us. 

Well then, let me discuss “my service and devotion” . . . .

Nomenclature aside, escrow agents and fund managers are (or should be) the same thing: people or companies who are responsible for holding and distributing the money needed for surrogacy and egg donation arrangements.  We exist to protect the people and the money involved in these third-party assisted reproduction arrangements. 

In fact, I opened Stork Escrow with my partner Kelly DuMont to do just that: we “poured ourselves a cup of ambition” to protect the people involved in surrogacy and egg donation arrangements from financial harm.  Kelly and I both had experience managing escrow accounts for third-party assisted reproduction and we had both heard some really sad stories of people losing their life savings from surrogacy and family building scams where money was stolen from the intended parents and the surrogate by people at the agency involved in the surrogacy arrangement.  Kelly and I decided to work together to try and find a better way to protect people from getting hurt financially while they worked to build their dream family. 

How escrow agents or fund managers achieve this goal—safeguarding the money and protecting people from getting hurt financially—is achieved in different ways and it’s sometimes dependent on state law.  To some extent, where your surrogacy is going to take place may dictate some of the terms of your escrow arrangements.

California’s surrogacy statute, for example, has provisions pertaining to who can hold the funds and in what type of an account.  If a licensed and bonded escrow agent is not used, California requires that funds be held in an “attorney trust account”.  There are different types of attorney trust accounts that can be used but the bottom line is that these accounts are only available to attorneys and hold the attorneys to very high standards regarding the management of the funds.  In contrast, some states require that independent or third-party escrow agents hold the money but don’t specify the type of bank account in which the funds must be held. 

New York just passed new surrogacy legislation, the Child Parent Security Act (CPSA) which goes into effect in February of 2021.  The CPSA requires that any party to a surrogacy arrangement deposit the money needed for the surrogacy with an independent escrow agent.  New York feels that an independent third party provides necessary separation from the parties interested in the financial transactions involved in a surrogacy arrangement in order to protect everyone involved.  In this context, the funds must be held by someone who has no relationship to the agency or to the people involved in the surrogacy arrangement. 

Using an independent escrow agent prevents self-interest from interfering in the management of the money needed for the surrogacy journey.  You don’t want it to be all “takin’ and no givin’” like that scam I mentioned.  You want to know that no one is going to be taking your money except to give it to someone who legally is entitled to have it. 

And that is really the answer.  If you want to know what an escrow agent or fund manager is, what we’re supposed to do, and why we exist, that’s your reason:  We are here to protect the money that the intended parents need to deposit to cover the surrogacy or egg donation expenses and we make sure it gets paid to the surrogate or egg donor in accordance with the terms of their respective contract.  Call us whatever you want, escrow agent or fund manager, at the end of the day regardless of our name or title, our job is the same: to protect the financial interests of the parties to a gestational surrogacy or egg donation arrangement. 

Third party assisted reproduction is a “rich man’s game, no matter what they call it”, and you may be using your life savings to make your family a reality.  You want to know that you are not putting your money into “another man’s wallet”.  

Why do you need an escrow agent or fund manager?  “Well you’ve got dreams [s]he’ll never take away.”

Up next:

Do all escrow providers offer the same fund security?  What are the different types of accounts used to hold funds and does it matter what type you use?  What are the most important questions to ask your surrogacy agency about escrow fund management?

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The Top Ten Things Reproductive Lawyers Can Help You With – Part 2

February 23, 2016 | By:

So in Part 1 we discussed some of the agreements you might need to enter into when building your family through third-party assisted reproduction and how my colleagues and I can help you with them.  Now let’s take a look at some of the more obscure but equally important issues that might come up.

back to our top ten list:

(6) Using cryopreserved embryos in the event of a divorce or after a death.  Do you know whether you can use frozen embryos after a divorce or separation?  Did you know that this is one of the hottest legal issues in third-party assisted reproduction law (Hello Sofia!).  What if you want to conceive a child using frozen embryos after your partner dies?  Will you be a legal parent?  Will your child be entitled to inherit from your partner’s estate, or your partner’s social security benefits?  These are some of the most complicated and cutting-edge issues in reproductive law and you don’t have to be Sofia Vergara to regret not having had a thorough discussion with an attorney before you make decisions (or have a pre-conception embryo disposition agreement prepared or even just check off a box on a clinic consent form) that has the power to change your life plans.  And heck, just look at Sherri Shepherd and her battle not to have child support obligations.  That case just turns my stomach.

(7) Managing money in a surrogacy arrangement:  You may be spending over $100,000 in connection with your surrogacy or receiving tens of thousands of dollars in compensation as a surrogate.  Do you know where the money is being held?  Do you know how and when it is being paid and what documentation, if any is being provided to support the payment?  What happens if your agency goes under and the escrow account was held by the agency?  Are independent escrow managers necessary and when should you retain one?  Do the state laws which govern your surrogacy arrangement provide special rules for how and where money must be held?  How do you know if your money is safe?

(8)  Doing a home insemination:  It may be a more affordable way to conceive your child (and more intimate as compared to the stirrups in your doc’s office), but will you have a legally recognized family if you do a home insemination?  Did you know that in some states a doctor must perform the insemination in order to terminate the sperm donor’s parental rights and ensure that the intended parents are deemed legal parents?

(9) Getting your birth certificate:  How and when can you get a birth certificate with the intended parents'(s) name(s) on them?  Can you get them before the baby is born or only after birth?  Do you need to do a second or step-parent adoption?  Is the law in the State in which your baby will be born uniform throughout the State or does it vary County by County or even Judge by Judge?  Do you know what you need to do, where you need to do it and when you need to do it in order to obtain a birth certificate for your child with your name on it?  One of my colleagues has a fairly famous quote from an interview he gave about the fact that the ease with which he can or cannot obtain parentage orders sometimes comes down to the button he pushes in the elevator in the courthouse.  Are you walking into a courthouse like that?  Do you have any alternative?

(10) Understanding the impact of changing laws:  Third-party assisted reproduction is a new and emerging area of the law.  Some states have statutes governing egg and sperm donation, and surrogacy, others have only case law (or judge made) law.  Some states have statutes or laws which are unfavorable and others have laws which are favorable to different types of third-party assisted reproduction.  Some states have outdated laws that may change in the near future.  Other states have laws which may be unconstitutional given recent decisions from the United States Supreme Court, but the state may not yet be complying with or adhering to new and evolving constitutional principles.  When and how will these evolving laws impact your family building and the recognition of your family, as a family?  And as long as we are discussing the status of various state laws, doctors (as much as we love and need them in this process) don’t always fully understand the laws, especially the nuances with which my colleagues and I have become familiar.  Just as I would never try and tell my clients what their latest blood test results mean,  and my clients should not listen to me with great seriousness when I put on my honorary lab coat, they shouldn’t listen to their doctor’s advice about what they can and cannot do to build their family.  Sure, get her opinions on what options you have, but check with someone who actually practices reproductive law before you cross a type of third-party assisted reproduction off your list because your doctor tells you that option isn’t available it to you.  

My colleagues and I can help you answer most, if not all of these questions.  We can help you make smart (or smarter) choices as you begin the often complicated process of building your family using donor gametes like egg, sperm, or embryos, or with the help of a gestational surrogate.  We can protect you in almost all of the scenarios and situations discussed in this top ten list.  Reproductive lawyers are here to help you become a parent and help make sure that your legal parent-child relationship and family are recognized by the government and other people who might try to challenge your status as a mom or dad.  It’s that simple.  And it’s that important. 

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