Surrogacy Agreement Talking Points: An Attorney’s Thoughts on Negotiating your Surrogacy Agreement
By Julia J. Tate, Esq.–[email protected]
When Intended Parents and potential Surrogates find each other, it can be a little like falling in love. Everyone seems so perfect. You seem to have so much in common with one another. Your hopes and dreams seem to mesh so well. You can’t imagine that there would ever be a disagreement that you couldn’t work out by just sitting down and talking. The process of negotiating your Surrogacy Agreement should burst that idealistic bubble so that you get an Agreement that can serve as a firm foundation for your relationship. After all, it’s hard to build on a bubble!
A new relationship between Intended Parents and a potential Surrogate (and her husband or partner) is also like other relationships in that we are often hesitant to ask important questions of one another. There are things that we think we’d just really rather not ask hoping instead that these topics will just arise in the course of the relationship. Parties to a surrogacy relationship usually wait for a lawyer to raise these hard issues. This is a less-than-optimal choice because, in addition to the danger that the attorney simply won’t think of a particular topic, it deprives the parties of the relationship-building experience of hashing out a difficult discussion. These conversations and the way they are initiated and conducted give the parties a chance to get to know one another on a deeper level. Trust in one another is built when the parties talk things through. It is much better to have this sort of trust-building experience in the low-risk environment of contract negotiation than in the stress-filled environment of a conflict which arises once the pregnancy has begun.
Having the parties actually negotiate the Agreement themselves may help reduce the chances of the Agreement being broken during the pregnancy. Studies on mediation (particularly divorce mediation) have shown that parties are much more likely to comply with terms to which they have agreed than terms which have been imposed on them. Such parties have a “buy-in” to the terms, whether it’s a surrogacy agreement or a negotiated marital dissolution agreement. Further, when parties have negotiated their agreement themselves they are more likely to understand each other’s values and the importance of certain terms of the agreement to one another. Knowing why something is very important to the other person makes it more likely that we’ll actually do that thing since we all have empathy for one another, to some degree.
So, with the understanding I’ve set out above, I have proposed a list of Talking Points which parties considering entering into a Surrogacy Agreement may want to discuss. I would like to use stronger language and say should or even must discuss, because the topics which prompt some hesitancy are probably the ones that are most important to discuss. However, being committed to parties doing this negotiation without the compulsion of the supposed experts, I will simply suggest that these topics be discussed.
Traditional Surrogacy or Gestational Surrogacy – By traditional surrogacy, we mean an arrangement in which the surrogate receives artificial insemination and becomes pregnant with a baby which is the result of the union of her own egg and the sperm in the artificial insemination. Gestational Surrogacy is an arrangement in which the surrogate receives the transfer of one or more embryos into her uterus and gestates the baby on behalf of the Intended Parents. The embryos transferred to her uterus may come from the union of the Intended Father’s sperm and the Intended Mother’s egg or the union of egg or sperm donated to the Intended Parents. The key factor is that the Gestational Surrogate is not the genetic mother of the baby she carries.
The distinction is very important. In a gestational surrogacy, in Tennessee, we can get a Court order prior to the birth, declaring that the Intended Parents are the legal parents of the baby and ordering the hospital to name them on the birth certificate. We can’t do that in a traditional surrogacy.
The risks Intended Parents take when they decide to do traditional surrogacy are too numerous to list here. In nearly all situations when I explain all the risks, the Intended Parents decide against traditional surrogacy. If you are seriously considering traditional surrogacy, please consult with your attorney about the risks.
Money–Money is a part of every surrogacy negotiation, even if the gestational carrier seeks to serve as a compassionate carrier and does not want any money. Even then the parties should discuss money so that all the parties are clear on the decisions being made and the basis of those decisions.
In many respects parties can craft their surrogacy agreement in whatever way they want. One big exception is money. Every State in the Nation (and probably every nation in the world) has a statute on the books making it a crime to pay money or anything of value in exchange for a parent surrendering his or her parental rights to a child and making it a crime to receive anything of value in exchange for surrendering parental rights to a child. So you can not draft a contract which says, in essence, the Intended Parents will pay the Gestational Carrier so much money and she’ll surrender her parental rights to them. You can not make these two events contingent on one another. To do so would be a felony at least in Tennessee.
Short of the above, on what basis do Intended Parents disburse funds to the Gestational Carrier?
Many contracts include provisions that state that the Gestational Carrier is being compensated for her time and trouble, for the pain and inconvenience that pregnancy and childbirth entails and for the risks to her own health and future reproductive capacity which she’s taking by carrying and giving birth to a child. While these may play into the funds transferred to the gestational carrier, it’s useful to make it clear that these are not the only things for which the Intended Parents are compensating her. Most recently, contracts have been designating percentages of the funds or even specific amounts as support to cover the Gestational Carrier’s housing expenses, clothing expenses, reduced earning capacity, food allowance and other specific items.
One reason for being so specific about the allocation of the funds is to prevent the Gestational Carrier’s insurance company from claiming that the funds that the Intended Parents pay to the Surrogate constitute “other insurance” from which the health insurance company should be reimbursed for amounts they’ve paid for her maternity care and for the delivery of the baby. If we are clear as to the reasons behind the support payments, insurance companies are substantially less likely to be able to recover their payments.
Most recently we have developed a clearer understanding that, eventually, it is likely that disbursements to surrogates will be deemed taxable. In an egg donation case, In re Perez, the Tax Court found that the funds which had been disbursed to the egg donor were taxable. The funds had been designated as in exchange for the pain and suffering which the egg donor anticipated having. Funds which a person in a lawsuit receives because of “pain and suffering” from an injury are not taxable. The Tax Court said that this characterization of the funds which an egg donor receives does not protect those funds from taxation. The pain and suffering that an egg donor sustains is reasonably expected when she enters into the donation, just like the pain and suffering a pro football player expects to have. Getting hit by big men is part of the reason they get paid so much. Of course, those payments are taxable. A surrogate’s disbursements may eventually be designated as taxable. At this point, the best we can do to protect a surrogate from having her disbursements taxed is to make sure that she is receiving support throughout her pregnancy, not compensation for carrying a child or for pain and suffering, and certainly not compensation for surrendering her parental rights.
Clients often ask how much is a reasonable amount for the gestational surrogate. While I do draft a number of these contracts, I can not make an estimate on this topic. It’s completely a matter for the parties to determine. The cost of living in a Surrogate’s area is one consideration. The extent to which the Intended Parents will have other expenses, like medical expenses, is also important.
Health Insurance–It is very important that the Gestational Carrier have health insurance that will cover her pregnancy. There are very few health insurance policies which provide for maternity coverage but do not provide coverage if the pregnant woman is carrying a child for someone else. The coverage is for her health care and, if she’s pregnant, she needs health care, regardless of how she came to be pregnant. Most policies do, however, have a provision in their terms relating to infertility treatment which says that the insurer will not provide benefits for surrogacy. Usually this means that if the insured person has infertility issues and needs a Surrogate to help the insured person have a baby, the insurance company will not provide benefits to cover the surrogacy. If this provision is in the gestational carrier’s policy this does not mean that the insurance company will not cover her care, it means that, if the woman who is planning to be a surrogate had fertility issues, the insurer wouldn’t cover the expenses of her having a surrogate for herself. It doesn’t mean that they won’t cover her medical care if she actually is a surrogate for another couple.
In every case in which the plan is to use the surrogate’s health insurance, the parties need to get her insurance policy and review it thoroughly. This is a 50 or 60 page book. It is not a five page summary. Do not be satisfied with a short summary. Likewise do not be satisfied with what someone on the phone with the insurance company says. The company is bound by their policy language, not what their employees say.
Often Intended Parents decide that they’d like to purchase health insurance coverage for their surrogate. This is usually quite difficult, if not impossible without such a long waiting period that the arrangement just becomes impractical.
If the parties opt to work together, in Tennessee, and the surrogate does not have health insurance, she may need to wait until the pen Enrollment period for coverage under the Affordable Care Act. This coverage is available but not always very affordable. There are two versions of ACA policies. One is the policy in which the insured person gets subsidies from the federal government to cover her premiums. The other is a policy purchased on the marketplace. Do not enter into a policy which is subsidized. The subsidies under these policies are based on the income of the insured person. If the insured person (the surrogate) doesn’t disclose the money disbursed to her under the surrogacy policy, she can lose her coverage and faced other consequences. If she does disclose her disbursements, her coverage may be terminated because she’s not eligible for the subsidy.
Some people ask about coverage through TennCare which is Tennessee’s version of Medicare. Getting this coverage is pretty challenging these days and it is not a good method for covering the medical expenses of a surrogacy. TennCare is a government benefit program, not an insurance plan. The taxpayers of the State of Tennessee are paying the medical bills of people on TennCare. As such it is inappropriate to have these good folks paying the medical bills for a surrogacy, especially when the surrogate is receiving considerable financial support from the Intended Parents.
Life Insurance –Most agreements include a provision under which the Intended Parents pay the premiums for a term life policy for about ten months from the date of the positive pregnancy test (or from the positive pregnancy test through a date which is about a month after the termination of the pregnancy). Term life insurance premiums are fairly affordable now so the Intended Parents can easily provide a substantial amount of protection against the economic impact on the Gestational Carrier’s family of her untimely death.
Few insurers will write a term life policy for such a short period of time. The shortest period of coverage which I have obtained is a five year policy. Given these circumstances, the burden falls on the Gestational Carrier to get the coverage and pay the premiums for which the Intended Parents reimburse her. At the end of the surrogacy, the Gestational Carrier may determine that she wants to keep the coverage (perhaps to cover another surrogacy) and so she just keeps paying the premiums. Other surrogates stop paying the premiums and the insurance lapses and ends.
Recently, some parties have decided to increase the amount of coverage beyond what would go to the Gestational Carrier’s family to provide for an amount of insurance which would go to the Intended Parents in the event of her death during while they are engaged in the surrogacy arrangement. The Intended Parents invest quite a bit of money in their efforts to bring a baby into the world. If tragedy strikes and the Gestational Carrier dies while carrying the Intended Parents’ baby, the Gestational Carrier’s family is not the only family to suffer economic loss. The Intended Parents also suffer a loss. Increasing the Gestational Carrier’s coverage by an amount which would go to the Intended Parents provides the Intended Parents with some compensation for the funds they’ve expended. This insurance payment may be the difference between the Intended Parents being able to recommence their efforts to add to their family by surrogacy or having to adjust to not having this baby enter their family.
Lost wages–If the Gestational Carrier works outside the home, the contract will usually provide that the Intended Parents will compensate the Gestational carrier for her lost wages if she has to miss work. This compensation is calculated based on the net wages, not the gross wages. Net wages are the wages less the federal withholding which would have been taken from the wages had the wages been earned. Other withholdings such as health insurance premiums, retirement contributions or other deductions are not deducted from gross wages in the calculation of net wages for purposes of reimbursement. The idea is that the Gestational Carrier’s household should not sacrifice anything as a consequence of work missed because of the surrogacy arrangement.
Contracts usually also provide for reimbursement for the Gestational Carrier’s Husband’s lost wages, if he has to be off work to assist his wife during the meetings before commencing the surrogacy or during the pregnancy or child birth.
Compensation for lost wages usually includes caps on the amount of the Intended Parents’ reimbursement for the Gestational Carrier’s lost wages and a separate cap on her husband’s lost wages.
Values about abortion–Parties considering a surrogacy arrangement should thoroughly discuss their values about abortion. One of the most difficult decisions which can arise in any pregnancy involves selective reduction. This is the procedure by which the number of fetuses growing within a woman’s uterus is reduced in order to increase the likelihood of the birth of healthy babies. Selective reduction terminates the lives of the embryos which are removed from the uterus.
All the parties need to understand the termination of life involved in selective reduction and thoroughly discuss how they feel about this. It can be hard to discuss this because the parties are afraid of finding that their values differ on this topic. They fear that this topic may be the deal breaker. I urge people to completely discuss this, despite their fears. It is much better to find out that your values differ before the pregnancy happens than when the need for a decision about selective reduction arises. The worst scenario is that the need for a decision arises and the parties realize there is a conflict and one side ends up having to do something in conflict with their values.
If you do find that your values differ in this area, it is not necessarily the end of the agreement you’d hoped to reach. You may be able to reach a compromise and make a plan which will work for everyone. Even if you can’t reach this Agreement, surrogacy does remain open for you. Another Gestational Carrier can be found and other Intended Parents can be identified for this surrogate. The key is in getting a good match.
Values about children in broken homes and single parents–Although some attorneys do not cover this topic, I think it is important for the parties to consider. I request that parties to contracts which I am drafting determine whether they want to continue the efforts to try to conceive if the Intended Parents’ marriage becomes troubled or breaks up prior to the pregnancy beginning or if one or the other of the Intended Parents dies before the pregnancy commences. Some Gestational Carriers may find that they feel strongly that they only want to help a two-parent couple become parents and that, if the pregnancy will bring a child into a one parent home, they do not want to do it. Again, this is best discussed before the issue arises. A Gestational Carrier’s decision to terminate the Agreement at this point would result in the loss of all the funds which the Intended Parents have already invested in their efforts to conceive with her.
Attendance during embryo transfer–As much effort as Intended Parents put into their efforts to conceive, it is somewhat ironic that using assisted reproduction means that the parents of a child do not actually have to be present at the time of conception.
Embryo transfer, while a miraculous event, is a medical procedure from which the Intended Parents are likely to be excluded. The Gestational Carrier may want them to be present as she commences to give them this tremendous gift. Their presence or absence may seem to be an indicator to her of their commitment to parenthood and to this process. This seems a reasonable way to look at it from her perspective as this is her only exposure to the long path the Intended Parents have been down in trying to form their family. Gestational Carriers almost never have had problems with fertility themselves. The Gestational Carrier doesn’t see the months of fertility drugs the Intended Mother has taken, the shots she’s given herself, the miscarriages she may have had, the grief she’s gone through when she’d started her period and found out, over and over again, that she’s not pregnant. The fact that the Intended Parents are willing to enter into a surrogacy arrangement, having gone through all those experiences, is the indicator of their commitment to parenthood. I suggest that the parties talk about all these experiences, despite the painful memories, so that the Gestational Carrier and her husband can know how dedicated they are to this endeavor.
Expenses can stand in the way of the Intended Parents being present at the embryo transfer. Usually Intended Parents have already spent quite a lot before they decide to pursue surrogacy. Then they are committing to even more expenditures throughout the surrogacy. The travel expenses and the time off work to be present at the embryo transfer may be considerable. The Gestational Carrier needs to take this into account if the Intended Parents are hesitant to commit to being present at the embryo transfer.
Attendance during the birth–The Intended Parents’ attendance at the time of birth is an entirely different matter than their attendance at the embryo transfer. Prior to the birth, the Gestational Carrier has the right and responsibility to make all the decisions about the management of the pregnancy and the birth process. After the birth, however, the Intended Parents have important legal obligations. Usually they fulfill these obligations by being present and making the decisions themselves. In situations in which the Surrogate and the Intended Parents live at considerable distances from one another, however, attendance at the birth could be a problem. This is usually handled by phone contact with the medical staff. Some situations may require more in-depth planning. For instance, in international arrangements Intended Parents may be requested to designate an agent to act on their behalf and to make decisions for their baby if they are not able to do so. This agent’s obligations usually extend even to take custody of the baby upon discharge from the hospital if the Intended Parents are delayed in getting there. In this age of managed care, hospitalizations are remarkably short for healthy births so an insurer urging discharge before an international parent can arrive is quite conceivable.
As the pregnancy draws to a close, the parties will prepare a Birth Plan which they will share with the delivering hospital prior to the onset of labor. This plan will usually set forth agreements such as who is to be in the delivery room and who will have bracelets allowing them access to the baby. Those items do not have to be spelled out in the Gestational Surrogacy Agreement but I still suggest that the parties share their thoughts on the birth experience at this point. This discussion lets them envision the process together and bond in their efforts to create this child’s entry into the world. It lets them get to know what is important to one another as well as how they will each respond to one another when they do bring up matters of importance. This builds trust between the parties. So when topics arise such as who holds the baby first and who holds the Gestational Carrier’s hand while she’s in labor, please don’t dismiss them as premature since there is not even a pregnancy yet. This is a chance to dream together. Such chances are rare and should be handled as precious gifts.
Post-birth contact–Parties have different feelings about the amount of contact they want to have with one another after the birth. Of course, emotions change as relationships are built throughout trying to conceive and throughout the pregnancy. Arrangements for post-birth contact are as varied as are the people engaging in surrogacy arrangements and, so long as the parties are in agreement, contact which varies from the initial agreement is just fine.
So why would the parties need to include this in the negotiation if they can change their arrangements after the birth? One reason is that talking about this lets you get to know the values of the people with whom you are about to get involved. It’s part of the process of getting to know each other. Another reason is that it sets a foundation that the parties can go back to if disagreements do arise. Further, negotiating this provision helps put the parties in a place of thinking ahead about the pregnancy and the birth. This can be useful in moving everyone into thinking about these other aspects of the Agreement.
There are really no norms on what people tend to put in this provision of the Agreement. I suggest that people think of this provision as describing what they want from one another if they’re not getting along. You may decide that, even if the adults in this arrangement have nothing in common and don’t want to spend any time together, everyone still wants to know where each other lives so that, when the child grows up, if he or she wants to meet the Gestational Carrier, such a meeting can be scheduled. Maintaining some degree of contact can make that possible.
Whatever your Agreement provides about contact after the birth, I will be in touch with the Intended Parents shortly after the birth and again a few weeks after the birth, to remind them to express their gratitude to the surrogate. This is simply a recognition that, once the Parents get home with their child, their minds will be completely on their baby and not on the Surrogate. For better than nine months, the Surrogate has been the center of attention, sometimes even uncomfortably so. This shift in attention, coming at a time when her body is adjusting to a different hormonal state, can leave a Surrogate feeling abandoned. After having done such a miraculous thing, the last thing anyone wants is for the Surrogate to come away from this feel any way other than completely appreciated. For this reason, I believe it’s almost always in everyone’s best interest for the parties to talk at least a little after the birth.
Privacy concerns–Parties on the different sides of surrogacy arrangements have different needs around privacy. Infertility treatment is daunting path which exposes couples’ most vulnerable sides. For many people this makes using Surrogacy to form their families something that they want to keep very private. Surrogates, on the other hand, have not gone through such a difficult path to get to the point of engaging in surrogacy. Surrogates are performing a wonderful act of which they are rightfully proud. They may want to talk about the experience and even describe it to various media outlets. Articles and news stories about surrogacy help make it more accessible and understandable to the general population so, these disclosures, do have their place. When they expose private matters, however, they are a problem.
Nearly all contracts include a provision which says that the parties will not disclose the identity of the other parties. I would suggest that the parties think beyond not disclosing the other parties’ names. Disclosing that a Gestational Surrogate lives in a particular State and is carrying or has carried a baby for a parent who lives in a different particular State can be a breach of that parent’s privacy. Her friends and co-workers, who know she’s been trying to have a baby, may know that she’s been traveling to that State quite often. It doesn’t take much for them to put the pieces together and then these people know all about her Surrogate. These are the kinds of situations which the parties should discuss thoroughly. Again, the process of negotiating the Agreement sets up the parties to think about what’s important to each other as situations come up. The goal of the Agreement is not merely to set out the rules of what shall and shall not be done, but also to help you establish the relationships upon which you’ll make decisions throughout the pregnancy and after the birth.
Conclusion–These are some of the topics you’ll want to discuss in your negotiations. Of course, each side may think of things that are important to them. This is your Agreement. The lawyer may write the document but Agreement in it and the behavior you’re setting out in it is all yours. You have the right, indeed the responsibility, to bring up what matters to you and make sure it’s covered to your satisfaction. Whether I draft your Agreement or you have another lawyer do this work, please make sure your Agreement meets your needs by speaking up.