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What Adoption Costs -- and Strategies to Pay for It

Susannah Snider

The two words experts typically use when describing the cost of adoption: "It varies."

Adopting a child can be an expensive goal for many families, especially if they have their hearts set on taking in a newborn. But adoption doesn't have to cost tens of thousands of dollars. Depending on the resources and methods aspiring parents use, it can be fairly affordable, even nearly free.

Here's what to know about the cost of adopting a child.

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How Much Does Adoption Cost?

The cost to adopt a child can range between nearly $0 and $50,000, depending on the process you use and country from which you adopt. Sound like a massive price range? That's because it is.

Here's what to know about different methods of adoption and their relative costs:

Domestic adoption. Adopting a baby from the U.S. is typically pricey. For example, parents who contract through an agency may pay between $20,000 and $40,000, according to the Child Welfare Information Gateway from the U.S. Department of Health and Human Services. An agency is typically a full-service option, with disparate costs rolled into an agency fee. Expenses may include the cost of a home visit (called a home study), legal fees, medical and living expenses for the expecting mother and travel fees.

An independent adoption, which occurs when the adoptive parents and expectant mother find each other, may be slightly cheaper. Costs can range from $15,000 to $40,000, according to the Child Welfare Information Gateway. An independent adoption is "kind of like selling your house on your own," says Amy Twombly, executive director of Hello Baby Adoption Consultants, based in Glastonbury, Connecticut. "You have to advertise, you have to market, you have to vet all these moms." You may be expected to pay for the home study, medical expenses, and legal and court fees for the adoptive and birth parents.

Adopting from foster care. This process may be essentially free, with states reimbursing adoptive parents for necessary adoption fees, including the home study and attorney fees. But, experts note, with many foster care set-ups, the ultimate goal isn't adoption but reuniting the child with his or her birth family. "You need to know when you go in: Your goal is to help work with the birth family to reunify the family with the child," says Dawn Davenport, executive director of Creating a Family, the adoption and foster education and support nonprofit, based in North Carolina. But she notes that there are thousands of children in the foster care system whose parental rights have been terminated and are looking for adoptive families. The greatest need is for kids over the age of 12, she says.

International adoption. Costs here can vary dramatically based on the country. You may expect to pay between $20,000 and $50,000 for an international adoption, according to the Child Welfare Information Gateway. Don't forget that you may need to travel several times to that country, which adds additional flight, hotel and travel costs. Some countries may also decline to work with LGBT adoptive parents and applicants from other backgrounds, so be thoughtful when working across borders.

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What Are Typical Costs Associated With Adoption?

Depending on the type of adoption you use, here are some typical costs for which you need to budget. If you're working with an agency, most or all of these may be rolled into a single agency fee. Ask to see a line-by-line breakdown of the agency's costs. Other fees may be paid separately.

Attorney fees. Adoption involves mountains of paperwork, whether you're working independently or through an agency. "We're not buying cars or adopting a puppy, we're dealing with human beings and want to make sure everything legally is going to go the right way," Twombly says.

The home study. You'll need to undergo this process where "people come into your home and they check it out," says Mariam Adams, a Merrill Lynch Wealth Management advisor in New York City. Twombly estimates typical expenses for the home study are between $900 and $4,000. And if you decide, for example, that you want to buy a home or upgrade your living arrangements before the adoption process starts, Adams says, that's another expense to consider.

A profile book. This book showcases your family to expectant parents and makes the case for why you'd provide a loving home for their child. This is a "mission-critical piece," Twombly says. Expect to pay $500 to $1,500 for a professional-quality profile.

Expectant parent expenses. The adoptive parents of a newborn should keep an eye out for these potential expenses. Depending on the state in which you're adopting and other factors, you may be asked to pay fees to help the pregnant mother. Those costs may include maternity clothes, rent, transportation, medical bills, insurance (if she's not covered by Medicaid) and the cost of the birth, Davenport says. These expenses may be less if you match with the expectant parent late in pregnancy. "If you're matched in the ninth month, there will be far fewer expenses," Davenport says.

Travel costs. You may end up traveling to another state or country to collect the child, so anticipate the cost of flying or driving, spending a week or more in a hotel and time off work. You'll need to get the adoption squared away legally before you can cross state or country lines with your adopted child.

Adoption consultant. This is an optional expense, but if you choose to work with an adoption consultant like Twombly to guide you through the process, expect to pay around $3,500 to $4,000, Twombly says. Ashley Folkes, a certified financial planner in Phoenix who's starting the adoption process with his wife, is paying about $4,000 to work with one. "She's a quarterback," he says. "When I meet with clients, I'm a quarterback with their financial lives. She does that for us."

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How to Pay Adoption Costs

While adoption can be pricey, there are strategies and resources aspiring parents can use to pay for or mitigate the costs.

Consider these ways to pay for the costs of adoption:

Employer benefits. One of the first things you should do in your search for assistance in paying for adoption is to check if you have an employer-sponsored adoption assistance program, Adams says. Depending on your company, you may have tens of thousands of dollars available to help grow your family. Unfortunately, this benefit isn't terribly common, with 11% of employers providing adoption assistance in 2018, an increase from 6% in 2014, according to the Society for Human Resource Management. Up to $14,080 in qualified assistance from your employer may be excluded from your income in 2019.

Don't forget to check in on what parental leave policies look like and how they'll work for adoptive parents. You'll need time off to collect and bond with the child, no matter the age of the child at adoption.

Tax credits. The adoption credit is not a refundable tax credit, meaning it can't bring your tax liability below zero, but it can be carried forward five years. For 2019, it's $14,080 per child and can be used to reduce qualified adoption expenses, such as "reasonable and necessary" adoption fees, court costs, attorney fees and travel expenses. For the 2019 tax year, the credit starts to lose value for taxpayers earning a modified adjusted gross income of $211,160 and ends at those earning a MAGI of $251,160.

Adoption grants. It's hard to count on these for assistance since you'll need to apply, but it's worth looking into adoption grants for aspiring parents. You may find grants set aside for LGBT adoptive parents, Christian parents or other groups.

Asking for help. Consider asking your parents -- if they have the means -- to help fund your adoption. This may be a situation in which a parent or grandparent is happy to make a gift to help grow your shared family. Some prospective adoptive parents also try crowd fundraising through a site such as GoFundMe.

Savvy borrowing. Taking on debt should always be done thoughtfully, but if you don't have $40,000 sitting in a savings account, you can consider borrowing from your home through a home equity line of credit or borrowing against your 401(k). "I'm not saying it's a great option, but it is an option," Adams says of tapping your 401(k). "You have to repay it, but it is at a reasonable interest rate." Remember that while you're borrowing against your 401(k), the money is not invested and loses out on any market gains.

Consider the strategy you'll use to pay for adoption in conjunction with your other financial goals, and ensure that you're leaving enough money set aside to actually raise the child, experts say. With tax credits, the option to adopt through the foster care system and potential employer benefits, there are strategies that can work for a range of financial backgrounds.



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