Parenthood is costly, no matter who you are, where you live, or how many people help raise your children. For many of those who identify as LGBTQ+, the parenthood price tag can increase exponentially due to the added cost of adoption, foster care, or assisted reproductive technology. After marriage equality was secured in 2015, family building suddenly seemed within reach more than ever for members of the LGBTQ+ community. Many thanks to Jim Marrocco, CFP®, CFA whose work within the Financial Planning Association’s PridePlanners Knowledge Circle contributed to this article. 
A Likely Rise in LGBTQ+ Parents
Data gathered in 2018 by the LGBTQ Family Building Survey indicates that a shift in LGBTQ+ growth is well underway. Take a look at these two survey findings:
- Of LGBTQ+ survey respondents aged 55 years and older, 33% either already have children or are considering having children.
On the other hand…
- 77% of LGBTQ+ Millennials (aged 18 to 35) are either already parents or are considering having children.
This is a 44% increase generationally! These LGBTQ+ Millennial aspirations offer a glimpse of a future wave of LGBTQ+ family building. Looking closer at the data, the survey also finds 63% of all LGBTQ+ Millennials want to grow their families in the coming years. This could happen by becoming first-time parents or adding more children to their family.
Piecing together the data, family planning is becoming more common in the LGBTQ+ community than in decades past. This begs the question: “How do we plan for this new wave of family planning?”
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LGBTQ+ Family Building Options
There are special challenges in building a family as LGBTQ+ folks. The processes are complex, not to mention the length of time and price tag associated with the journey. As a member of the LGBTQ+ community, there are three primary options available to starting your family:
- Adoption. When a parent (or parents) assume legal parentage of a child.
- Assisted Reproductive Technology. Fertility treatments like Artificial Insemination (AI), Intrauterine Insemination (IUI), or In-Vitro Fertilization (IVF).
- Surrogacy. An arrangement between a woman and intended parent (or parents) to carry a child through pregnancy and birth.
Let’s look at these pathways in more detail.
Types of adoption range from foster care adoption, private adoption, or international adoption. Each of these adoption routes have different criteria. Should adoption be your chosen path, it will be important to partner with various agencies and attorneys to help guide you throughout the process.
Adoption timelines can vary widely. It depends on the individual situation, with most taking longer than 12 months. On top of that, finalization could take over a year after adoption has occurred.
You may be wondering, “How much does adoption cost?”
According to the Child Welfare System Information Gateway, this figure could range from $5,000 to $40,000. There are other financial ramifications to be aware of too, including:
- Budgeting. How will you pay for the potential $40,000 in costs? What is the plan for where these funds will come from?
- Work Benefits. Does your employer offer adoption assistance?
- Risk Mitigation. Could you end up losing some of the costs?
- Tax Considerations. Is the adoption tax credit available to offset a portion of the costs? If so, how much and what tax year?
Regarding the Adoption Tax Credit, there are three key details to remember:
- It’s non-refundable, but you can carry it forward for up to five years.
- There is a phase-out between $214,520 and $254,520 (2020 Tax Year).
- Only reasonable adoption expenses qualify.
Should you ultimately decide to pursue adoption, a financial planner can help you crunch the numbers, as well as connect you with a qualified CPA for tax purposes.
Assisted Reproductive Technology
There are two primary types of Assisted Reproductive Technology (ART) to assist with LGBTQ+ family planning:
- Intrauterine Insemination (IUI) or Artificial Insemination (AI). This process is where donor sperm are inserted into the uterus.
- In-Vitro Fertilization (IVF). This process creates an embryo in a laboratory and then transfers it to the carrier.
A very common question is, “How expensive are these fertility treatments?”
For IUI or AI, total costs can range from $300 to $1,000 per cycle. Should you choose IVF, expect to pay more. Given the variable nature of this option, average costs start at $15,000 but can quickly exceed this baseline.
When presented with ART costs for family planning, there are important financial considerations you will want to navigate with your advisor:
- Budgeting. What does the journey look like with high and low expense estimates?
- Work Benefits. Are any available to you?
- Insurance Considerations. Will insurance cover any of it? This is unlikely unless diagnosed as infertility, which is not the case for same-sex couples. Is there an opportunity to change to a better plan before starting the process?
- Tax Considerations. Can you take advantage of the medical expense deduction? Fertility treatment costs are deductible medical expenses when they pertain to your own body or spouse’s body.
Working with an advisor to answer these questions before you start your parenting journey is critical to alleviate potential headaches down the road.
The final family planning option available to the LGBTQ+ community is surrogacy. You can think of this in two parts:
- Fertility Clinic. This is your guide during the fertility process.
- Surrogacy Agency. This is a surrogacy matchmaker and partner throughout pregnancy.
At minimum, you can expect the full surrogacy process to take well over a year to navigate – if all goes smoothly. Realistically, 15 to 24 months is more common.
So, “What’s the price tag?”
The total cost of surrogacy can range from $90,000 to $130,000. It is essential to remember these expenses will be incurred at the start of the process, which means you will need all that money up front. Not to be forgotten are the incidentals, such as travel during pregnancy and planning for any extended stays after the baby is born.
There are a host of financial items to plan for when considering surrogacy to build your family, such as:
- Budgeting. Where will the funds come from? Is the money on hand for up front costs given the range of possible outcomes?
- Work Benefits. Does your employer offer assistance?
- Insurance Considerations. Surprise! No part of the surrogacy process is covered by the intended parents’ insurance until the baby is born.
- Tax Considerations. Surrogacy expenses and surrogate fertility costs are not deductible medical expenses.
Additional Planning Considerations Around Family Building
Starting a family opens up an array of planning items that soon-to-be parents need to consider. Two key focus areas include:
- Life Insurance. It’s best to take out a policy before the baby arrives.
- Estate Documents. Do you have these in place? Have you named a guardianship for your child? Hardcoding your wishes is a must!
Navigating life insurance can be confusing in its own right, which is where an advisor can add clarity and peace of mind. As for estate planning, same-sex couples have unique considerations when formalizing their wishes. Whether establishing your estate planning documents for the first time or looking for a complete refresh, Estate Planning Tips For Same-Sex Couples is a good place to start.
Starting Your Family
Choosing to start a family can feel like navigating a maze, especially for LGBTQ+ folks. As a planner, it’s not just about helping you afford the family planning process, but planning and understanding how this process will fit into your financial life after the baby arrives! Schedule a call with an Abacus advisor today to take the first step in starting your family.
 Jim Marrocco, CFP®, CFA is the Founder of Thinking Big Financial, a New York City-based financial planning and investment management firm that specializes in partnering with the LGBTQ+ community.