Over the past two decades surrogacy has become an increasingly mainstream and accepted way of starting a family, but few are aware of the financial implications should the marriage or partnership fall apart.
We speak to Emily Foy, associate at legal firm Payne Hicks Beach to discover the common pitfalls and how to avoid them.
Strabens Hall (SH): Why is surrogacy on the rise?
Emily Foy (EF): The rapidly changing law, progressive medical developments and altering public perception have opened doors for many intended parents who need help in creating their family (whether because of infertility, medical difficulties, same sex couples or for single parents). The rise in celebrities and other high profile individuals speaking candidly about surrogacy and why it was most suitable for them has also helped. Kim Kardashian and Kanye West, Tom Daley and Dustin Lance Black, and Cristiano Ronaldo all welcomed children via surrogate in 2018.
The figures speak for themselves: The number of parental orders (which confer legal parenthood on the intended parents and extinguish the rights of the surrogate) more than doubled from 117 in 2011 to 284 in 2017. This statistic is likely to be very much the tip of the iceberg, as many parents either decide not to apply for parental orders to regularise their parental status through the Court or have not complied with the necessary formalities and requirements to enable them to do so. This potentially leaves the intended parents in a vulnerable position without proper parental rights, as the child will then remain the child of the surrogate and not of the intended parents.
Senior Client Director, Nicholas Toubkin: ‘Through our work with family lawyers, we come across an increasing number of alternative family arrangements. It is essential that individuals who have had a child via surrogacy, or who are considering doing so, ensure that their legal and financial positions are robust and appropriately structured to ensure that this exciting development for their family does not carry any negative implications with it.’
SH: Divorce is a costly and complicated process that nobody truly prepares for. But what happens when there is a surrogate child involved – is the law for custody the same as it is for a naturally conceived child?
EF: Surrogacy, even without divorce and separation, comes with its own potential legal, emotional and financial pitfalls. However, the beauty of a surrogacy arrangement is that with the right advice, you can make decisions from the outset that protect you in case of things deteriorating, a privilege which few people are afforded in divorce proceedings.
In surrogacy arrangements a woman will carry a baby for an intended parent or parents. The baby could be the biological child of one or both the intended parents but, until there are orders to the contrary, the surrogate mother (and her husband or female partner if she is married) will be the surrogate child’s legal parents.
To rectify this, intended parents can apply for a parental order, which has the effect of extinguishing the surrogate’s rights as the legal parent and conferring joint legal parenthood and parental responsibility to the intended parents. This includes a new birth certificate registering the intended parents as the surrogate child’s parents.
Any disputes about who is to care for the child in the future following a divorce or separation would then follow exactly the same pathway as with a naturally conceived child. Parents would be expected to agree care arrangements between them, with the fall-back of mediation or legal advice if they were unable to agree. Failing that, either parent could bring Court proceedings and ask the Judge to determine what was in the best interests of the child.
SH: What if a parental order is not made?
EF: Then you potentially face a legal minefield. The surrogate child remains the legal child of the surrogate parent (and her spouse, if she has one) and the intended parents have no rights, even if the surrogate child is the biological child of one or both of them. This results in the intended parents having no legal authority to make basic decisions about their child’s medical care and education. Legal complications may arise in the event of a separation and there may be problems with inheritance and pension rights, as the surrogate child has no automatic right of inheritance. The surrogate parent also remains financially responsible for the child, thus further complicating matters.
The law in this field is still rapidly evolving but divorce has a knack of bringing out the worst in people and it is certainly not a time to be beginning a dispute about a child’s parentage, potentially involving the surrogate parents alongside the divorcing couple. A little research and investment of time and money at an early stage can really pay dividends further down the line.
SH: You specialise in the legal aspects of financial and children matters around divorce: what, if anything, should people be doing to ensure they are financially prepared should their marriage disintegrate, especially where surrogacy is involved?
EF: There are various steps people can take these days in order to protect themselves and their loved ones against the financial consequences of the breakdown of a marriage. These include legal steps (such as pre-nuptial agreements), financial arrangements (Wills, tax and estate planning) and emotional steps (mediation, therapy and open discussion).
The more complicated your personal situation, including having a child via surrogate, the more important it is to ensure that you have considered all eventualities and taken legal and financial advice for your specific circumstances. Most hurdles can be overcome far more readily and you can save a great deal of heartache (and cost!) with some advance planning and advice from specialists who can prioritise the wider protection of your family.
Client Director, Christopher Yardley: ‘Surrogacy is a burgeoning industry and a service fraught with potential risks. It is clear that specialist advice should be obtained at the outset so that an effective strategy can be established and implemented in accordance with the family’s desires”.
SH: How much does surrogacy typically cost?
EF: Even before the breakdown of a marriage, surrogacy can be a very expensive and complicated process. The UK allows payment of “reasonable expenses” to a surrogate, which alone can be up to £30,000 (though the concept is fluid and the welfare of the child is paramount). However, financial compensation for surrogates abroad, not to mention the associated costs of flights and accommodation for intended parents, can easily cost double or even triple that. Intended parents therefore need to ensure that their finances are in order and that they are fully prepared for the costs that are to come.
The surrogacy journey can be full of pitfalls and I would firmly advise that intended parents or potential surrogates spend time thoroughly researching, reading, speaking to charitable organisations and engaging specialist advisors (financial, legal and immigration experts, as a start) well before embarking on the surrogacy route.
SH: Parliament voted recently to allow individuals to become the legal parents of children born through surrogacy in the UK. Why is this significant?
EF: Until the start of this year, single applicants were not permitted to apply for parental orders. Happily, following much campaigning, in 2016 the former President of the High Court Family Division, Sir James Munby, made a formal declaration that UK surrogacy law was incompatible with the Human Rights Act as it discriminated against single parents and their children. Subsequently, on 3 January 2019, a new law came into force granting single applicants the same rights to apply for parental orders as couples.
The new legislation also provides retrospective provision for single parents who already have surrogate children but have not previously been permitted to apply for parental orders to remedy their position. For these existing parents, instead of applying within six months of the child’s birth, they will be able to apply within six months of the law changing (therefore by 2 July 2019). This will go some way to remedying the discrimination previously felt by prospective single applicants and, hopefully, will smooth the surrogacy pathway for many more families.
However, to apply, single parents must be the biological parent of the child, which continues to exclude some parents (for example a single mother who conceives a child using a donor egg and sperm and a surrogate mother). Therefore, there is still work to be done and creative and bespoke legal and financial solutions are still required for individuals in these circumstances.
Whilst Judges in surrogacy cases will attempt to manoeuvre the law in order to protect the long-term welfare of a child, the law is still lagging behind social development. All cases are fact specific, there are many pitfalls and the need for tailored specialist advice cannot be under-estimated
If you would like to discuss options available for arranging your surrogate child’s finances please speak to Nick or Chris. If you would like to speak more about surrogacy please contact Emily here.