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Financing An Adoption

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Adoption is, truly, the investment of a lifetime... but the costs seem to rise every year, in the domestic adoption system as well as in foreign adoptions. Congress is considering doubling the adoption tax credit, but that doesn't do much to help those who are struggling to find the means to get to placement (and particularly with the recession looming overhead)!

Can anyone out there offer some good advice for newbies about managing the expenses of adopting? How do you save up enough to enter the adoption process, especially if you're coming off a long and costly round of fertility treatments? Or do you borrow to the hilt? Take out a second mortgage? And then what about all the unanticipated, added costs that come with new babies?

We all hate to talk about it, but the reality is that this "elephant in the living room" scares off a lot of good, would-be parents. Adoption shouldn't ever be about money, but it does have its place in the conversation--so let's talk about it... Feedback? Advice? Rants? Suggestions?

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Good post, Elizabeth.  It is so unfortunate that money does have to play a factor in adoption because it does turn so many hopeful couples away from the process.  I am curious to know how others dealt with the financial part of it.  We had to borrow money and don't know if we can afford to adopt again anytime soon.  Would love to hear what others did.

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Guest Vonda

My advise to those adopting would be to take advantage of any money saving situation that comes your way.  Drive to Texas for orientation and finalization, so you can fly when your birthparents go into labor.  Send extra money into your escrow each month, even if you don't owe anything that month, or set up a savings account especially for adoption expenses.  Take advantage of friends or family who work for airlines, hotel chains, and rental car companies.  Even if you don't know anyone who works for these kinds of companies, explain your situation.  It never hurts to ask, right???:)

OH YeaH, don't forget to keep in touch with your orientation group.  One couple may find a great deal and would love to pass it on.  But, you never know where your baby may be born, and there may be an Abrazo couple there that could let you in on some good deals in their hometown     :)

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Guest cathy

The high cost of our Peruvian adoption (ฮ,000) still makes me angry.  The government/lawyers etc did not have the childs best interest at heart and just kept prolonging the paperwork for almost 7 months we had to stay in Peru!  Since the adoption cost so much, I did not have the luxury of being a stay home mom.  I work night shift, 12 hours now, so I can be home for my son and as many know, parents sacrifice alot for their kids.  Right now, I work alot of overtime at work since my son is in school during the day I sleep a few hours.  I am proud to say that working full time I have never missed a school field trip and volunteer weekly at the elementary school.  Only 2 of my neighbors work, but they did not have any expense with their babies ( insurance covers everything).  Since this adoption will be around ฤ,000 I am working alot of OT and am forgoing movies, going out to dinner, etc....but I will still probably need to use some sort of low interest credit card checks.  I found some 2.9% for 6 months.  I know first union bank offers adoption loans.  I know when we got back from Peru, I hd ร,000 on credit cards...OUCH..  I felt like I way paying off a car or something...like I said, it made me angry that it costs so much, especially because many good parents cannot affort to adopt.  We figured with the 2 adoptions and the fertility tx's we will have spent 贄.000.  The end result of a child makes it all worth while.  Also, try selling some things around the house at consignment shops etc...I have made a little extra money doing that.  We have a 9.5 year old who needs braces on top of all this!  I know it will all work out somehow.  I will work12 hour shifts 7 days a week if I have to to adopt again, so I can either stop working for a while or work part time, weekend option, after the baby is one year old.  I am determined not to work full time , esp. the first year as I was forced to do with my son.  Hang in there! Cathy

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ADOPTION AT WHAT PRICE?"

The Washington Times

" target="_blank">http://www.washtimes.com/culture[/i]

    After three years of trying to have a baby, "my husband and I decided to take a more serious look at adoption," Theresa Kwasny wrote in a 1998 e-mail message to an Internet adoption-support group.

    But her first packet of information about adoption contained stunning news — an estimated cost of adoption between ฝ,000 and ฤ,000.

    "While we have boundless love in our hearts for a child, we do not have boundless cash in our pockets," Mrs. Kwasny wrote. "Can we have hope that we can have a baby without going to the poorhouse?"

    Sticker shock has become a rite of passage in adoption.

    The most common form of adoption — of children from U.S. foster-care systems — is the least expensive, often costing a few thousand dollars.

    But adopting from state foster care, especially across state lines, can be time-consuming and frustrating. Moreover, not all prospective parents are willing to adopt children who are of a different race, school-age, disabled or part of a sibling group.

    Parents seeking infants or toddlers typically turn to domestic private adoption or international adoption. Both types carry estimated price tags of ฝ,000 to ึ,000, according to the National Council for Adoption (NCFA).

    Children are priceless and many adoption expenses are certainly reasonable, several adoptive families say, but some expenses are questionable.

    "Somehow, there's got to be a way to get this so that there's not so many people with their hands in the pot," said Tom Schwendeman, who estimates that he and his wife, Kirsten, have paid at least ไ,000 to adopt four young children with Down syndrome.

    The Battle Ground, Wash., couple, who have two teen-agers, adopted two children privately in the United States, and twin girls from Russia.

    Each adoption was more costly than projected. The twins' adoptions, for instance, originally were estimated at ภ,000. The Schwendemans estimated they paid closer to ำ,000, because of costly international paperwork, Russian-required housing payments and surprise "last-minute" fees.

    Expenses for the toddler they adopted from New Jersey and the baby from Pennsylvania — บ,000 and ů,000, respectively — also ran higher than expected because they were handled privately, without going through the public foster-care system.

    "People like us, with a single income it's almost impossible to make

it. We are strapped payday to payday and that should not be," said Mr. Schwendeman, who works for an airline.

    "But it's the stay-at-home moms who have the time" to care for the children, said Mrs. Schwendeman. "We do it because we love the kids," she said, adding that she and her husband had long ago decided they would adopt children with Down syndrome.

    Stuart Mac Lean, a Virginia adoptive father, rejoices in his three foreign-born children and has no complaints about his adoption attorney or the group that has helped make the adoption happen. But he questions several expenses — like being fingerprinted repeatedly or the charge for a "green card" for a daughter who automatically becomes a U.S. citizen upon arrival here.

    "When you're talking about an adoption that costs over ฤ,000 and you're adding several hundred dollars more to it, it adds up. There's so much rigamarole you have to go through," said Mr. Mac Lean.

    NCFA President Patrick Purtill said adoption is a complex, delicate process that touches many people's lives and involves weeks of paperwork, home studies and legal counsel.

    One reason many domestic private adoptions are expensive is because the costs of caring for unwed mothers — including those who decide not give up their children for adoption — are shared by adoptive families, he said.

    The NCFA's Adoption Factbook III says "if the average cost of serving a pregnant client is Ű,000, and if one of every three clients decides on adoption, the cost per adoption is ศ,000." Birth mothers are not required to repay the costs of their care, so agencies recover some of these expenses by spreading them among adoptive families, the book said.

    Still, the reason for high adoption costs basically is "supply and demand," said Peter Gibbs, director of the Center for Adoption Research at the University of Massachusetts.

    Decades ago, religiously funded charities worked to find families for babies, usually at minimal cost to the families, said Mr. Gibbs. But with the advent of contraception, legal abortion, acceptance of single parenting and persistent biases against adoption, fewer infants now are in need of adoption.

    As a result, adoption charities largely have given way to independent agencies and other professionals who sell their services mostly to find babies for families, said Mr. Gibbs.

    Adoption reform has tended to focus on children who are in state foster care, including the 127,000 now free for adoption.

    Federal law now forbids blocking adoptions because of race or keeping children indefinitely in foster care. This year, Congress raised the adoption tax credit to บ,000, so taxpaying adoptive families can recoup some of their adoption costs. State tax credits also may be available.

    But adoption is largely state-run and filled with special-interest groups, which makes it hard to enact reforms such as universal standards, regulations or other cost controls, say adoption specialists.

    Some corporate and private foundations have stepped up to help adoptive families with costs. Maureen Hogan, executive director of the National Adoption Foundation, which offers low-interest loans and grants of 踰 to Ŭ,000, says she gets "hundreds" of applications from families each week.

    "Consumers need to rise up and demand transparency, consistency and accountability" in adoption, said Mrs. Hogan, who compared the adoption industry to the funeral-home industry in its ability to overcharge people at an emotional and vulnerable time in their lives.

     Meanwhile, the Kwasnys, who live in Springdale, Ark., overcame their shock at the costs of adoption, opened a "baby fund" and last year paid ย,000 to adopt a 9-month-old girl from China.

    "Adoption is a great thing, and we're glad there's babies out there," Mrs. Kwasny said, adding that they would like to adopt a little sister for Kate in a year or two. "But I still wonder why the costs have to be so high."

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Do the birthmother's medical expenses ever get completely out of control? We were wondering how much to budget for that portion of our adoption. Also, what happens if she changes her mind after the birth? Are we still responsible for any of the medical expenses for the birthmother or child?

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Sugarfamily,

The best advice I can give you on your questions is to call and talk to the wonderful staff at Abrazo and they will be happy to answer them for you. After all they are the experts and they will give you the best answer.

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After several years of infertility, we decided last December that adoption was the best option for us and when we found Abrazo, we were doubly excited! At the same time, we recognize the magnitude of our decision and want to make sure we have our house in order before moving forward. We didn't want to go into debt to finance the adoption, and we also didn't want to get things rolling during a particularly busy time at work. So we are waiting for a few months, but I'm on the edge of my seat! I read a lot of adoption and first-year baby books, so I'll be educated, and I participate in this forum...but I can't wait to get started!

If anyone has suggestions for how to handle the "waiting before the waiting", please let me know! It is so tempting to just jump right in early, and then worry later about the details. We've been trying to start a family for several years now - I wish we could just do it!

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This is such a good question! I think perhaps that once folks do adopt, the agony of the wait that preceded the experience becomes a distant memory... but knowing when the time is right is such an important quandry...! (Or is there truly a "right time" at all? And who's to say? And what if both members of a couple are not "in the same place at the same time" on this, as so often happens? Probably only you can know which answers are right for you.)  Yet, waiting to be sure and saving up in advance is important, since you have to budget not just for adoption but for the realities of ever-increasing expenses afterwards...(diapers, daycare, Disney vacations, braces, teenage car insurance, prom dresses, etc!)  

As for pre-adoption readiness tasks, sounds like you're on the right track... study up  now, because once the baby comes home, there's so little time for reading and parenting classes, in reality..! Being active in the Forum can help sensitize you to birthparents and open adoption issues... and do check out also the topic "Ups and Downs, Weathering the Wait" under "Parents-In-Waiting," which offers insights from folks already in the process and waiting for Placement Day... Anybody else have any ideas to share?  

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Guest Jim & Rita

Forget about when. WHO can afford to adopt this days. And HOW. Thats what we would say. Why does it have to cost so much. Seems like one big racket IMHO.

:angry:  :angry:  :angry:  :angry:  :angry:  :angry:  :angry:  :angry:  :angry:

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Infertility treatments can be (most of the time are) as expensive or more expensive than adoption.  The benefit of adoption it is not "if you get a baby, but when" (To quote Elizabeth)  We have done it both ways and yes, there is expense involved, but speaking for all the adoptive moms and dads, it is well worth it.  What we feel for our children is priceless. :)

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To respond to Jim and Rita, adoption can be a " big racket" if you do not do your research and you do not go down the right avenues in your attempts to adopt.  Adoption can be very affordable depending on the decisions that you make.  You made a very broad statement without any type of supporting evidence. :angry:

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Guest suebee

My husband and I are not rich, and our adoption was expensive. It is, however, do-able. We saved as much as we could up front and then took a home equity loan to finance part of it. It does seem unfair that I could have delivered a child (if able) for a few hundred dollars because of medical insurance, but we had to use a great deal of our savings to adopt a child. But life is not always fair.

We know the money was well spent to provide for our son's birthmom's needs and the services of the professionals we enlisted to help with our adoption. Most people don't think twice about paying $20,000 for a car, but can't fathom paying that much to adopt. Our lives are so much richer and fuller because of our son and our relationship with his birthmom...there are some things you can't put a price tag on!!  

Also, don't forget about the $10,000 income tax adoption credit. And many employers offer adoption assistance. My husband and I petioned both of our employers for financial assistance, and, as a result, his company began a $1,500 adoption assistance (two others with his company have also completed adoptions).

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Some folks have asked lately about using home equity loans to finance adoption plans--anybody out there have any experience with (or information on) this?

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Guest Paul and Michelle D

All I can say about borrowing against the equity in your home is make sure there is not a lot of other debt sitting on your personal "balance sheet". One nice thing, typically the monthly payments are low so during maternity leave, you can pay the minimum while maintaining great credit.  Just be careful...Don't ever borrow the amount or more than your house is worth.  Also, don't forget about the $10k tax credit...It sure does help!

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We too, did a "second mortgage" to finance our adoption. Our bank actually did a line of credit, which was very helpful since you don't really know the exact amount of the adoption until then placement or finialization. So by taking out the line of credit, it was easy to write checks or send money when it was needed. Also the payments are pretty low too. We are really trying hard to save those pennies, we really want another Abrazo babe! Good luck to all!

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Guest mommy2

We borrowed against our 401K plan... it worked out well, because we are able to pay it back with a low interest and we in a sense are paying ourselves back (the interest and the principle go back into our accounts)  We looked into home equity loans and also lines of credit, but found that the interest rates were a little high.  Hope this helps.

It is TOTALLY worth it!!!!!!  As I look at my baby trying to take his first steps as I am typing this..... I would do it all again at ANY cost!

Mommy2

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Guest Colette

Paul & Michelle, Having adopted twice I understand your financial concerns. The financial component is a huge consideration, after reading your posting as well as others I felt compelled to try to find alternative means of financing an adoption other than a second mortgage. One thought is if you have 401ks or 403bs you may want to take a loan against one or both of them if your company allows, this way you are paying yourself back instead of a creditor. I did a search to identify what was available through loans and grants. I am sure you may have done similar searches however just in case.  It appears there are several agencies that provide degrees of assistance, and even more if you are considering adopting a child with special needs.  I haven't used them or really know much about them other than the information that is posted, however some of them sounded viable, for example http://www.acresofhope.com/finresources.htm

I did a google.com search and found pages of information.  I hope this information is useful.   Best wishes

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We are parents in waiting (Aug. 02) and are trying to figure out how to finance things.  My parents are very excited to become grandparents again and are willing to loan us some money.  You might have some relatives that are willing to help out- it doesn't hurt to ask.  We also found the best deal is to borrow against your 401-K.  There is no interest, and you pay yourself back setting up your own payment amount and the timeline in which you will repay. When our time comes, we will borrow against my husband's 401-K account.   Another friend of mine financed her adoptions on credit cards.  She put it on her regular credit card and then transferred the balance to one of those 0% interest cards.  When the free interest period was up she applied for another 0% interest card.  She paid for 3 of her adoptions on credit cards and did not pay any interest!  Good luck to everyone.  

Denise

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Guest IrishOmar

While I realize that everyone situation is different, I would strongly recommend only borrowing against your 401k as a LAST (or at least way down the list) resort.  The main reason, is it looks really good in the short term, but it really hurts in the long run.  The purpose of a 401k is for retirement and pretax savings, when you take out a loan, you are losing the great benefits of time-compounding and when you repay the loan you also lose the tax savings, as you are paying it back with after tax money.

My bottom line is just make sure you fully understand ALL the repercussions.  That said, if that was the only thing stopping us from completing an adoption, we would, without hesitation, take out whatever money was needed.

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Another thing to consider is that with a home equity loan, the interest you pay is tax deductible.

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I just wanted to provide a link to Adoptive Families magazine's website http://www.adoptivefamilies.com/index.php there is currently a link on the left-hand side under "Pre-Adoption Resource Center" called, "Help with Adoption Expenses".  At the bottom, there is a link to a website that lists various non-profit organizations that offer grants and other sources of help.

-Lisa :)

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One of the cost risks that many prospective parents don't always remember to budget for are those funds lost if an adoption plan goes south (which can happen whether an adoptive family commits to a match and then changes their mind about moving forward or whether a birthparent realizes after matching that adoption may not be the right plan, after all.)

While Abrazo does make a diligent effort to manage case expenses in a prudent and responsible manner, remember that any disrupted match may result in some lost funds, regardless of the length of time the case was matched. Why is this? It's because any "out of pocket" costs incurred on behalf of a case at any time by our nonprofit agency become the responsibility of the committing adoptive family at time of matching with that case.

What does this entail? Sometimes, just several cabfares provided to bring a birthparent to the agency to register and select the adoptive family, or travel expense for an agency staff member to have provided the same services to a birthparent out of town... in other cases, it may include groceries and/or housing and/or medical/legal costs incurred to provide for a birthparents' needs before a match was made.

These are considered "reimburseable" expenses under state standards, enabling agencies to pass such costs on to the families who wish to potentially benefit from the subsequent match. However, under no circumstances can agencies require birthparents to repay an adoptive family for that assistance in the event that the case outcome does not go the way of the adoptive family's choosing. That's a hard pill to swallow, sometimes, for those pinching pennies along the way to parenthood... We respect that.

No loss of money--or dreams or hope-- is ever easy. But we also know that those who seek to adopt must come to the process prepared to face such potential losses, realizing that those who ultimately make those adoption dreams come true for others face much greater lifelong losses which are never reimburseable. Know that this cost risk factor does not affect all families who enter the process, but it is something we address at every orientation weekend, in the hopes of preparing our newest clients for all possible risks and outcomes on this rollercoaster ride we call "adoption."

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I'm wondering if any one can share some helpful information about financing an adoption.  What loans are available?  What are the interest rates?  Do you really get that $10,000 tax credit that the government promises if you make under $150,000?  

    Also, why is adoption so expensive?  I've checked with a number of "non-profit" agencies that charge close to $20,000 for a domestic adoption.  Any contact with one agency is at a cost of $135/hour.  I'm a professional with a Master's degree and a job I'm proud of, but anything near that kind of money sounds more like a dream than a reality.  I mean, we're looking at an annual income close to $300,000!!!

    Also, I have to say that it is disturbing to me that it is cheaper to adopt children of certain races or children with disabilities.  How is this ethical?  If we are really paying for actual expenses (legal, medical, agency...) and not "buying" children, shouldn't adoption costs be more or less the same for all adoptees?  If anything, it seems like a child with a disability would cost more than a healthy child due to extra medical expenses.  I know that I have limited knowledge on all of this and I am hoping that the laws of economy, supply and demand, and personal greed are NOT at work in the adoption market.  

    Please share any helpful information and insight!

Laura

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