In the emotionally charged and logistically complex world of third-party reproduction, trust is everything — but trust alone is not enough. Surrogacy, egg donation, and embryo donation arrangements can involve hundreds of thousands of dollars in medical, legal, psychological, and logistical expenses — including compensation for surrogates and donors. These funds are frequently held in escrow over the course of a year or more. As Intended Parents take this vulnerable and deeply personal journey, one critical decision they often overlook is who should hold and disburse those funds. Increasingly, the answer is clear: escrow should be managed by a qualified independent, and bonded trust or escrow company — not by an attorney or agency involved in the transaction.
California, a global leader in reproductive law, has established a best-practice framework that discourages any party with a legal or financial interest from controlling client funds. Under Family Code § 7961, non-attorney surrogacy or donor facilitators are legally required to direct clients to deposit funds into either a bonded, independent escrow depository or an attorney trust account.
Attorneys Can Protect Funds — But That’s Not What They’re Trained To Do
Many reproductive law attorneys manage client funds responsibly and with integrity. In fact, some go to great lengths to ensure proper documentation, timely disbursement, and careful reconciliation. But that is not their core training or function. Attorneys are not escrow officers, fiduciary administrators, or banking compliance professionals. They are legal advocates — and asking them to manage disbursements while representing one party in a highly sensitive family-building arrangement invites unnecessary complexity and risk.
Consider the ethical and professional tensions: an attorney is duty-bound to advance their client’s interests. But if that same attorney is also holding funds in trust and is asked to delay or block a disbursement , even if the contract calls for payment, they are now in conflict. Their role as a neutral fiduciary is undermined by their duty to advocate. And they may also face external pressure from agencies, who refer cases and may nudge attorneys to release funds in a way that preserves the agency relationship — even when client instructions or legal standards suggest otherwise.
These pressures aren’t abstract. They’re real. And they show up in moments that matter.
When Escrow Goes Wrong: The Cost of Role Confusion
The ART field has already seen devastating failures when roles are blurred:
In all of these cases, the absence of an independent, professional escrow company created an opening for abuse, error or loss. When professionals try to wear too many hats — advisor, fundholder, gatekeeper — things can go wrong.
Why Independent Trust Companies Are Built for This
Trust and escrow companies that specialize in assisted reproduction are not law firms. They are financial institutions. Their teams are trained in fiduciary operations, trust law, disbursement protocols, and compliance. They have proper checks and balances, external oversight and audits, and are bonded and insured. Intended Parents, surrogates and donors deserve financial transparency — not the confusion and risk that come from operations lacking true clarity. And they are neutral as they don’t represent any party in the arrangement.
This structure provides:
Companies like SeedTrust have become industry leaders by focusing exclusively on these functions. With a team of professionals from finance, law, and healthcare, and a secure digital platform, SeedTrust provides transparency and confidence in every disbursement. Their segregated client accounts and full bonding coverage protect all parties — not just the party who funded the journey.
The Hidden Cost of Attorney-Held Escrow: Conflict, Delay, and Liability
When attorneys serve as escrow agents, even with the best intentions, they open the door to complex ethical dilemmas. If a dispute arises over a disbursement — for example, if Intended Parents believe the surrogate has breached the agreement — the attorney may feel forced or even instructed by the client to refuse making a payment.
At that point, the only recourse may be to file an interpleader action — asking a court to decide who is entitled to the funds. That process is slow, expensive, and emotionally draining for everyone involved. And it can arise because the fundholder has a dual role they were never meant to play.
In contrast, a trust company simply follows the terms of the agreement. If a dispute arises, the parties and their attorneys resolve it outside the escrow system — without entangling the fundholder in the conflict. While an interpleader action may still be necessary in rare cases, involving a neutral escrow provider removes any question about the attorney’s objectivity or conflicting loyalties. That transparency preserves trust in the process and keeps the professional boundaries intact.
Appropriate Exceptions — and Why They’re Rare
There are a few narrow circumstances where attorney-held funds may still be appropriate. For example:
In these instances, an attorney trust account can serve a legitimate transitional function. But they should not be used as a substitute for independent escrow in a full ART arrangement.
Where the Law Stands: National Trends Favor Escrow Separation
The field is evolving — and state law is starting to catch up with best practice. Examples include:
Even in states without codified mandates, neutral escrow is the default recommendation from seasoned attorneys, clinics, and agencies.
Conclusion: Let Each Professional Do Their Job
Attorneys are essential to protecting the rights of Intended Parents, surrogates, and donors. But protecting legal interests and managing disbursements are two very different things. When professional roles are blurred, a lack of clarity invites delay, dispute, and ethical exposure — risks that responsible practice is meant to prevent.
Independent trust companies were built to solve this. They are bonded experts and detached from the emotional and legal entanglements that often arise in ART journeys. They prevent problems before they start — and protect all parties equally.
Let attorneys advocate. Let agencies coordinate. Let escrow professionals handle the money. That is not just best practice — it’s the standard of care the field deserves.
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