Frequently Asked Questions
Why do I need an independent escrow manager or an escrow account?
Third party assisted reproductive arrangements like surrogacy and egg donation are legally complicated and emotionally charged relationships. You want to be focusing on the pregnancy and/or your impending parenthood, not on whether a check was sent and received by the right person on or before a certain date. We, at TSEMCI™, are always extremely disturbed when we hear stories of people who entered into a surrogacy arrangement without an escrow manager and had issues over payments spoil their relationship with their surrogate or otherwise diminish what should be a joyful experience. We also are very troubled when we hear that people have been taken advantage of by people who have mismanaged their funds. Many reputable agencies require that an escrow agent be used, and some states (Illinois for example) require that a third-party or independent escrow manager be used to manage and distribute funds in a surrogacy arrangement. Some agencies have their own escrow agent and many are very good. However, as a consumer you need to confirm that your “escrow” or “trust” account is an account that is held separately from any business operating account. All bank accounts are not created equal and in some banks and some states, anyone can open a checking account and have the checks say “escrow account” or “trust account” on their face when in actuality it is a regular checking account not subject to the bank’s rules and regulations for true escrow or trust accounts. Having an independent fund manager – or at least one that discloses any ownership interest between it and the agency you are using – will help ensure that people do not try and take advantage of you and your money and will ensure that your surrogate or egg donor will receive the money to which she is legally entitled to receive.
TSEMCI™ has been created to offer even greater security than just being an independent fund manager. The Stork Escrow Management Connection, Inc.™, is co-owned by both an attorney and an accountant. By virtue of being a licensed attorney, Elizabeth Swire Falker, Esq., enables TSEMCI™ to hold escrow funds in a special account that is held to extremely high fiduciary and ethical standards, what is known as an IOLTA. The funds held in the IOLTA are disbursed and managed by Kelly DuMont, an accountant, whose management also is held to extremely high fiduciary standards. Both owners of TSEMCI™ are subject to disciplinary action, if not harsher penalties, if the funds being held and managed by TSEMCI™ are not managed properly.
What is an IOLTA and does the money earn interest while in this type of account?
TSEMCI™ places all the funds it is managing in a special Interest On Lawyer’s Trust Account (IOLTA sometimes it is known as an IOLA), a special type of account that is only available to attorneys, and is highly regulated. The management of the funds in the account is held to extremely high fiduciary standards – attorneys holding funds in an IOLTA can potentially lose their license to practice law if the funds in the account are mismanaged.
IOLTA’s do earn interest. However, the interest is paid to New York State (the State in which our IOLTA’s are held). The interest typically funds non-profit criminal justice programs. If you would like more information on where the interest is paid and for what purpose TSEMCI ™ can send you a link to an article published by the State of New York which explains IOLTA’s in greater detail.
Is TSEMCI licensed, bonded and/or insured?
TSEMCI™ is bonded and insured. We are happy to provide information regarding our insurance coverage or our surety bond upon request.
TSEMCI™ is not licensed as escrow companies in New York are not subject to licensure. Instead, the assurance provided by a license is secured through attorney and co-owner Elizabeth Swire Falker’s license to practice law in the State of New York where the accounts are held. Liz’s conduct as an escrow agent is regulated by the laws pertaining to IOLTA’s and thus her status as a New York licensed attorney serves as a form of licensing — indeed perhaps the only kind of license applicable in New York would be that provided through her license to practice law. We have provided a link to a consumer article on escrow in New York that explains escrow companies in NY and things consumers should look for when hiring an escrow agent in New York.
How long is the account maintained/open?
The account is maintained for however long you need it to be opened and/or for any period of time in which TSEMCI™ is distributing funds on your behalf. Typically in a surrogacy arrangement the account is opened when we are retained and is managed until approximately three months after a baby is born. The time period really depends on what type of expenses are being paid out of the account. If TSEMCI™ is paying hospital bills directly to the medical provider, the account will be open longer than others. As we can never anticipate whether and for how long expenses will need to be paid after the baby is born we cannot give an estimate of the duration the account will be open until are in the middle of managing payments in a pregnancy. We thus “guesstimate” that surrogacy accounts will be open for three months following birth. Egg donation cycles are much faster, and we close-out escrow as soon as we are advised to do so by the agency; usually about one month after the conduct of an egg retrieval procedure. We also depend on surrogacy agencies to advise us regarding the time to close-out your account (if one is involved) but the difference between the two is that the point in time when we get those instructions in a surrogacy depends on many variables whereas egg donation cycles are more straight-forward from a time management perspective.
How do I transfer/deposit funds to you?
You can wire the funds, send them via a service like TransferWise, or send them by check. We typically request that funds be wired as out-of-state checks and those over a specific amount of money will be held by the bank for approximately ten days. In this case we have no access to the funds to make payments. With wire transfers we don’t encounter that problem and the funds are available to us for disbursement within 24-48 hours. Wire transfers also better facilitate the establishment of accounts with international clients. As discussed below, we also accept deposits via credit card subject to a transaction fee to ensure the account is not under-funded by the deduction of fees by the merchant bank.
How will you let me know when I need to transfer more money into the account?
As discussed in more detail in our retainer agreement, you will receive monthly reports of the expenses paid out of the account. When those reports are prepared TSEMCI ™ will evaluate whether sufficient funds are on deposit to pay remaining and anticipated expenses or whether additional funds will be needed. If additional monies are needed TSEMCI ™ will discuss with you and your agency how much is needed to replenishing escrow. In some instances, the agency will tell us how much additional monies it wants deposited into escrow for purposes of replenishment.
How do you know if something should be reimbursed/covered through the escrow?
Attorney and owner, Elizabeth Swire Falker, Esq., or TSEMCI’s Escrow Account Administrator, Jamie L. Bunyan Broadwood, Esq., will read through your gestational carrier/surrogacy agreement (GSA) or egg donation agreement identify expenses that could be paid under the terms of the agreement, and any terms and conditions pertaining to the payments. That information is logged into a special proprietary calendaring system. All scheduled payments, like monthly compensation, are logged into this calendaring system and payments will go out to the carrier automatically per the terms of the applicable agreement.
Would my surrogate send you receipts for reimbursement (doctor’s visits, copays, etc) or does that come from my agency or the doctor?
TSEMCI™ will provide an expense reimbursement form to your surrogate or egg donor by which she will submit receipts for all expenses that are not specifically addressed in the contract, but for which she is entitled to reimbursement per the terms of your agreement with her. An example of this type of reimbursement request would be for travel-related expenses to and from the fertility clinic on the day of the embryo transfer or egg retrieval procedure. We require that in addition to completing the form she provide all back-up documentation including bills, receipts, or any other document evidencing the need for reimbursement. Copies of all the documents will be on file in TSEMCI’s office and will be available to you for review at any time. Anything for which she requests reimbursement that is not addressed in the contract will be submitted to the agency and you (or you, your attorney, and the carrier’s attorney) for approval before the expense is paid.
What if I have a question about what a payment was for or why it was made?
You get a detailed statement emailed to you every month which outlines each payment that was made, the check number, and the reason for the payment. You also can request a statement at any time (24/7) through our website and a statement will be send to you current through the day it is sent.
How long does it take to set up the escrow account?
It only takes a few days to set-up the account. We will send you an intake sheet, an overview letter describing the escrow management process, a retainer agreement for our services, and a check list of documents we will need from you in order to manage escrow (like a copy of your GSA). You also will receive a letter with instructions for funding escrow together with the amount to be funded. If your GSA does not require that the account be fully funded at the time you sign(ed) your GSA and instead by the date of embryo transfer, you will be notified of the amount needed for the initial deposit. Many times the escrow account must be fully funded as of the date of execution if the GSA (or shortly thereafter), by medication start, or by the date of the embryo transfer procedure. Depending on what your agency requires and what the GSA provides we will let you know how much to deposit initially. In egg donation cycles, typically the account needs to be fully funded prior to the egg donor’s medication start date but that too varies based on the terms of the egg donation agreement and/or the agency managing the cycle.
Can we fund the account by credit card?
Yes. TSEMCI™ accepts payment by credit card. However, payments made by credit card have transaction fees applied to them by the merchant or credit card company through which the payment is being made. These fees are determined based on the amount of the deposit and are deducted from the deposit as it is made into our account. Accordingly, we ask that all escrow clients who want to utilize a credit card for purposes of funding escrow pay a nominal transaction fee to better ensure that your account is not underfunded through credit card payment. If the transaction fee winds up depositing more than what was requested for deposit, we will refund the difference to you, and if the account is underfunded having included the transaction fee we typically we request that you send us a check for the difference (usually only a few dollars either way). If you have any questions about payment by credit card please contact us for further information.
What happens when the account is to be closed?
Upon confirmation from either you or the agency that all bills and expenses have been paid, TSEMCI ™ will begin the process of reconciling your account and preparing a final accounting. This process is explained in greater detail in our retainer agreement. Once it has been determined that all bills and expenses have been paid in relation to your egg donation or surrogacy journey, Kelly will prepare a final accounting detailing all of the transaction processed by TSEMCI and will refund any monies remaining on deposit to you either via electronic transfer or check.