How to Make Adoption an Affordable Option 2015

How to Make Adoption an Affordable Option How to Make Adoption an Affordable Option

Expenses Related to Specific Adoption Types | 18 Waiting Child Adoption | 19 Expenses Related to Finding a Child | 19 Pre-Placement Visit Expenses | 19 Counseling Expenses | 19 Medical Expenses | 19 Independent Adoption | 20 Expenses Related to Finding a Child | 20 Legal Expenses | 20 Birth Expenses | 20 Adoption Insurance Expenses | 21 Acknowledgments Resources Conclusion Planning foraChild’s Future Support for Adoptive Families Financial Resourcesfor Adoption Expenses Post-Adoption Expenses Adoption Information Adoption Checklist Birth ParentSearch Trusts forChildrenwithDisabilities Beneficiary Designation Wills andTrusts Parenting or Adoption Classes Support Groups Loans Sliding-Scale Fees Federal FamilyandMedicalLeave Act Employee BenefitsPrograms Military Subsidies Financial ResourcesforWaiting Child Adoptions Assistance/Subsidies andTaxable Income Income Tax DependencyExemption Adoption Tax Credits Services Personal RecordsandHealthCare Preparing foraChild Kinship/Relative Adoption Intercountry Adoption | 39 | 38 | 34 Assistance fromSocialServices|31 Assistance withMedicalExpenses|31 Title IV-E Adoption Assistance Programs|31 Assistance withNonrecurring Adoption Expenses|30 Loan Sourcesto Avoid |34 Possible LoanSources|34 Military Assistance for Adoption |32 Claiming the Adoption Reimbursement|32 Claiming the Adoption Tax Credit|28–29 Nonqualified Adoption Expenses|28 Qualified Adoption Expenses|28 Counseling |26 Special Education|26 Tutoring |25 Health CareCoverage|25 Health CareImmunizationandHistory|25 Social SecurityNumber|25 Birth Certificate|25 Potential Risks|22 Travel Expenses|22 Paperwork Expenses|21 Legal, Agency, andChildCareExpenses|21 | 25 | 40 Sidebar: Typical Child-RaisingExpenses | 36 | 35 | 23 | 31-32 | 34 | 39 | 37 | 24 | 36 | 28 | 39 | 21 | 35 | 37 | 22 | 32-33 | 35 | 24 | 37 | 29 | 27 | 33 | 29 | 30 | 24

How to Make Adoption an Affordable Option INTRODUCTION Many prospective adoptive parents are highly motivated to adopt a child, but are How to Use concerned that the process may be too this Booklet complex and expensive. Other parents, who are in the midst of the adoption How to Make Adoption an Affordable process, are surprised by the various Option is flexible enough for both expenses. The National Endowment prospective adoptive parents who are ® ® for Financial Education (NEFE ), new to the process and those who the Adoption Exchange, and the Dave already have done their research but ® Thomas Foundation for Adoption are need specific information about finances. providing this booklet, How to Make Parents can read this booklet from start Adoption an Affordable Option, to help to finish or use the table of contents to parents prepare for all the financial find the specific information they need. costs of adopting and raising a child. • Web references: This book frequently This booklet covers expenses common refers to reliable resources on the to most adoptions, expenses unique to Internet. To find the information the various types of adoption, financial referenced in this booklet, visit the cited assistance for adoption and post-adoption website and enter the publication’s expenses, and tax breaks available to name in the search field. adoptive parents. • Child Welfare Information Gateway: Prospective adoptive families need not be The U.S. Department of Health and deterred by myths about the expense of Human Services’ Administration of adoption, but they also should not allow Children and Families department emotions to blind them to the real costs. provides a great deal of reliable With careful financial planning, adoption information on its Child Welfare can be an affordable option. Information Gateway website, www.childwelfare.gov. As with other references, enter the publication or page name in the search field. 4 tions ratherthangovernment funding. adoption agenciesrely onfeesanddona- ernment contractstodo so.Otherprivate are infostercare,and theyreceivegov- with publicagenciesto placechildrenwho outside theUnitedStates.Somework adoptions, oradoptionsofchildrenborn areas suchasinfantadoptions,domestic Private agenciestendtospecializein or for-profitagencylicensedbythestate. A privateadoption agencyisanonprofit Private Adoption Agency family services. services, ordepartmentofchildrenand social services,departmentofhuman have namessuchasdepartmentof adoptive parents. The agenciesoften waiting childreninfostercarewith county agencyresponsibleforplacing A publicadoptionagencyisastateor Public Adoption Agency helps tounderstandadoptionterminology. all ofitsdirectandrelatedexpenses,it To understandtheadoptionprocessand Terminology Adoption • www.adoptex.org. The Adoption Exchangewebsiteat Step Guideto Adoption. Alsovisitthe download acopyofthefreeStep-by- www.davethomasfoundation.org and Foundation for Adoption websiteat of adoption,visittheDave Thomas For moreinformationonallaspects Adoptive parents and adoptive families families andeverythinginbetween. single parentstomarriedcouples any partiesinterestedinadoption,from “adoptive families”areusedtodescribe The terms“adoptiveparents”and : 5 waiting toadopt. have completedhomestudiesandare also listpotentialadoptiveparentswho and relatedservices.Someexchanges they providebasicadoptioninformation waiting childreninprintandonline, agencies oftenshowcasephotosof parents inmorethanonestate. These that servewaitingchildrenandadoptive exchanges arenonprofitorganizations Regional, national,andintercountry children waitingtobeadopted. have websitesshowingphotosofthe a stateagency. Manystatesandagencies completed anadoptionhomestudywith with alistofadoptiveparentswhohave waiting inthefostercaresystem,along maintains alistofadoptablechildren nonprofit, state-operatedexchangethat that placechildren.Manystateshavea adoptive parentsandadoptionagencies connections betweenprospective An adoptionexchangeprovides Adoption Exchange • Waiting child: A childwhoisinfoster defined asfollows: In general,however, thetermsare eligibility forfederalfinancialassistance. interchangeably inrelationtoachild’s child” and“childwithspecialneeds” Some statesusetheterms“waiting Special Needs Waiting Child,Childwith agencies are considered waiting children. through stateorcounty adoption adopted together. Mostchildrenadopted brothers andsisterswho needtobe children areschoolage, andsomeare abandoned. The majorityofwaiting may havebeenabused,neglected,or because oftheirparents’ actions;they come intothefostercaresystem to asawaitingchild. These children care andwaitingforadoptionisreferred

How to Make Adoption an Affordable Option • Child with special needs: The Internal Myths About Adoption Revenue Service defines a child with special needs as a minor who should When people express interest in adoption, not be returned to his or her parents’ they may encounter a variety of reactions, home and whose adoption is unlikely such as “Are you sure you can afford unless assistance is provided. See the that?” or “But you have to be married to Special Needs Adoption: What Does It adopt!” Many reactions to the idea of Mean fact sheet at www.childwelfare.gov adoption are based on myths. for more information about definitions of special needs and cost specifications. Myth 1: All Adoptions Are Expensive Adoption costs vary widely, depending Foster-to-Adopt Home on the type of adoption. According to A foster-to-adopt home is approved the Child Welfare Information Gateway, for both foster care and adoption. the range of adoption costs includes: Sometimes children who are removed from their homes because of abuse or • Waiting child: no cost to $2,500 neglect are placed with adoption-minded • Private adoption agency: individuals, couples, and families in $5,000 to $40,000 foster-to-adopt homes. The children are not legally available for adoption at the • Independent adoption: time of placement, so there is a chance $8,000 to $40,000 the child will be reunited with his or her family. • Intercountry adoption: $15,000 to $30,000 Depending on the reason the child was removed from the home, the child may Many public agencies provide adoption return home in a process known as subsidies for children who are waiting “reunification.” Reunification requires for a family, and some private agencies the parent(s) to resolve the issues may adjust fees based on family income involved in the removal and prove that or other criteria. For more information they can adequately care for the child about costs and ways to defray them, and ensure his or her safety. If the see the Costs of Adopting fact sheet issues remain unresolved and the at www.childwelfare.gov. parents’ rights are legally terminated, the child becomes available for adoption. Myth 2: Adoptive Families Must Be Rich With foster-to-adopt homes, the transition Many people with average incomes to a new permanent home can be made and modest homes adopt children every more seamlessly. year. Adoption professionals who make decisions about placing children consider Open, Semi-Open, emotional maturity and financial stability and Closed Adoption more than actual income. Open adoption, semi-open adoption, and closed adoption are generally defined Myth 3: Adoptive Families Must Own as follows. Note that individual agencies Their Own Homes may have different interpretations of Renters and homeowners can adopt as these terms. long as the home has adequate space for the child. 6 • for moreinformation. Adoption sectionatwww.childwelfare.gov See theConsideringOpennessin • • Typically therecordsremainsealed the child. ongoing communicationsabout family knoweachotherandhave the birthparent(s)andadoptive regular basis.Inafullyopenadoption, some casesthechildmayvisitona parent(s), theadoptivefamily, andin even aftertheadoption. foster/adoptive familythatcontinues relationship betweenthebirthfamilyand with birthparentssotheremaybea Foster parentsareencouragedtowork waiting childrenareclosedadoptions. reaches adulthood.Mostadoptionsof some states,untiltheadoptedchild unless acourtorderisobtainedor, in records aresealedpermanently. before placement. After adoption,the about thechildandbirthfamily receives nonidentifyinginformation third party, usuallytheadoptionagency. all communicationtakesplacethrougha information sharingislessfrequent;and numbers usuallyarenotexchanged; exchanged. Inaddition,thebirth and telephonenumberstypicallyare one inwhichlastnames,addresses, Open adoption: An openadoptionis other. The adoptivefamilyusually families donotcommunicatewitheach or theadoptivefamilyissharedand fying informationaboutthebirthfamily the focusisonconfidentiality. Noidenti- Closed adoption:Inaclosedadoption, Last names,addresses,andtelephone result, communicationismorelimited. adoption, thefocusisonprivacy. As a Semi-open adoption:Inasemi-open 7 Intercountry Adoption placement instatute. see howyourstateaddressesnonagency Or, searchthestatestatutesdatabaseto Be Adopted, orPlaceaChildfor Adoption. statute onlinebooklet,WhoMay Adopt, Child Welfare InformationGateway’s state visit www.childwelfare.gov andseethe your stateallowsindependentadoptions, in most,butnotall,states. To findoutif Note thatindependentadoptionsarelegal family interestedinadoptingherchild. adoption orhelpthebirthmotherlocatea mother whoplanstoplaceherchildfor doctor. The thirdpartymayfindabirth through athirdparty, suchasalawyeror An independentadoptionisarranged Independent Adoption family connections andculturaltraditions. the childaswell abilitytomaintain such asincreasedstability andsafetyfor benefits tobeingadopted byrelatives, to oneorbothparents. There are many guardian topreservethe child'slegalties some relativeschoosetobethechild’s Reporting System(AFCARS),although Adoption andFosterCare Analysis and adopted byrelativesaccordingtothe children adoptedfromfostercareare by statelaw.) About 30percentof child. (Thedefinitionof“relative”varies person withacloserelationshiptothe relative, in-law, stepparent,orother The kinorrelativemaybeablood related byfamilytiesorpriorrelationship. which thechildisadoptedbysomeone A kinshiporrelativeadoptionisonein Relative Adoption Kinship or for moreinformation. Country sectionatwww.childwelfare.gov See the Adopting Childrenfrom Another a countryotherthantheUnitedStates. child bornin(oranaturalizedcitizenof) An intercountryadoptioninvolvesa

How to Make Adoption an Affordable Option See the Kinship Care and Kinship Myth 4: Adoptive Parents Must Be Adoption section at www.childwelfare.gov Married and Without Children for information on kinship adoption from foster care as well as information Single people, couples without children, on adopting a relative through and families who already have children intercountry adoption. by birth or adoption can adopt. In some states, single lesbians and gay men can For stepparent adoption, states often adopt, and a few states allow same-sex streamline the adoption process. couples to adopt. However, many private For more information, see Stepparent agencies and foreign countries have Adoption at www.childwelfare.gov. specific requirements for the marital status, sexual orientation, age, weight, Guardianship income, number of children, and religion A relative may become a legal guardian of people who adopt their children. for a child rather than completing an See Who May Adopt, Be Adopted, adoption. Unlike adoption, guardianship or Place a Child for Adoption? does not sever the parents’ rights and at www.childwelfare.gov for the caregiver does not become the legal more information. parent. The parents can petition the court to end the guardianship at any time. Myth 5: Adoptive Families Must Pay for Everything Guardians generally are able to access services on behalf of the child. Some A variety of financial resources may states offer guardians monthly subsidies be available to help families cover to help with the expense of caring for some of the costs of adoption, including the child until age 18 or 21. For details, sliding-scale fees from agencies, federal see Subsidized Guardianship at and state subsidies for the adoption and www.childwelfare.gov. ongoing care of waiting children, federal tax credits, and employer benefits that help with qualified expenses. Home Study, Home Adoption Study Myth 6: Legal Fees Are High A home study, sometimes called a home adoption study, prepares and evaluates Usually, legal fees are a small portion the prospective adoptive parents and of the adoption costs, with the exception helps match the family with a child. of independent adoptions handled by a For more information, see The Adoption lawyer. The legal fees may be included Home Study Process fact sheet at in an agency’s fees or they may be an www.childwelfare.gov. additional cost to the adopting family. Usually, there are no legal fees for families adopting children from foster care as these fees typically are covered by nonrecurring adoption subsidies.

8 Pre-Placement The pre-placement period is the time between the completion of the home study and when the child comes to live with the adoptive family. Placement Placement occurs when a child moves in with the family who plans to adopt him or her. an Affordable Option an Post-Placement Post-placement is the time after the child has been placed in the adoptive home and before finalization. The social worker conducting post-placement supervision will visit the home several times during the six to 12 months between placement Adoption and finalization. During this time, the social worker will provide support for the adoptive parents and child and help obtain any necessary professional assistance. A certain number of visits are required by the courts before the adoption can be finalized. How to Make Finalization Finalization is when the court takes the necessary action to make the child a legal member of the adoptive family. Usually, the whole family goes to court with an adoption worker or lawyer. Post-Adoption Post-adoption is not a specific period of time—instead, it is the active, rewarding, and challenging process of living as a family after the adoption has been legally finalized.

9 AN OVERVIEW OF THE ADOPTION PROCESS The adoption process varies significantly depending on the type of adoption. In most cases prospective parents will request help from a public or private adoption agency, a lawyer, or another intermediary. Many different expenses, federal laws, state laws, and county regulations may be involved, creating a possibly confusing and complex experience. An overview of the process, which is provided here, can help prospective adoptive parents with decision making. For more details, download the Step-by-Step Guide to Adoption available on the Dave Thomas Foundation for Adoption website at www.davethomas foundation.org. Also see the State Laws on Adoption section at www.childwelfare.gov.

10 TIP While waiting for a child, continue General Steps learning about adoption. The actual steps involved in an adoption 8. Prepare for the child to come home. may vary depending on the type of adoption. In general, adoptive parents • Open adoption: For an open take most of the following steps: infant adoption, preparation may include visits with the 1. Learn about adoption by researching birth parent(s). on the Internet, talking to adoptive parents, reading publications, and • Waiting child: For a waiting contacting an adoptive parent group child adoption, pre-placement

that welcomes prospective adoptive visits with the child will be held Affordable Option an individuals and couples. at a mutually agreed-upon location and time. TIP For intercountry adoptions, • Intercountry: Adopting a child pro spective parents are encouraged to research medical and psycho- from another country may require logical issues that are common in travel to the child’s country to international adoptees. finalize the adoption. Adoption 2. Attend adoption information classes. 9. Bring the child home. 3. Consider their own feelings about 10. Begin the adjustment period as adoption and the preferred type of a new family. adoption to pursue—for example, 11. Finalize the adoption. waiting child, foster-to-adopt,

intercountry, agency, or independent 12. Continue the lifelong adoption How to Make adoption. experience. 4. Consider preferences regarding an open, semi-open, or closed adoption.

TIP In general, waiting children adoptions The Home Study (children adopted from foster care) Home studies are not standardized and are considered closed adoptions. may vary from state to state and agency 5. Interview several agencies or lawyers to agency. The type of adoption likely will experienced in the preferred type of influence who performs the home study; adoption. Attend orientation meetings it is important to choose the appropriate and then select an agency or lawyer. adoption agency or licensed social worker to perform the home study so it will be 6. Have a home study completed. (See accepted by the court. Note that the home the next section, The Home Study.) study process may be streamlined, or not required, for relative/kinship adoptions 7. Start the process of finding a child for and stepparent adoptions. Check with the family based on recommendations the state or county department of social from an agency, licensed social worker, services for guidance. or lawyer.

11 Expect some or all of the following to be In the course of the home study process, part of the home study process: prospective adoptive parents will have the l opportunity to talk with the social worker Interviews with the prospective about the following topics: adoptive applicant(s) individually and together (if a couple) l Why they want to adopt l Group meetings involving several l Their readiness to parent applicant families (many agencies l do this) The family’s values l l Autobiographies written by each Their hopes and expectations for prospective adoptive parent the adoptive child l l A home visit Their family’s strengths and weaknesses l Medical reports from the prospective l adoptive applicant(s)’ physicians How the family handles crises and change l References from friends l and associates Where they will get support or professional help, if needed l Proof of employment l Investigations into any criminal record, including the state’s child abuse Tips for Selecting registry, and fingerprinting (see the Adam Walsh Child Protection an Adoption Agency and Safety Act of 2006 section at www.childwelfare.gov for details) or Lawyer l Participation in adoption information Each entity in the adoption process sets training classes its own fees for adoption services. As of this writing, there is no central rating l Personal financial information service that monitors and/or evaluates l adoption agencies and services. Follow Copies of tax returns these tips to help ensure a smooth and l Beliefs about discipline and the affordable process: methods used l Compare adoption fees among l For intercountry adoptions, families adoption agencies, adoption lawyers, may need to prove to the U.S. and other adoption arrangers government income and/or assets (intermediaries). that put them at 125 percent or more l Read the How to Assess the above the poverty level for the size Reputation of Licensed, Private of family that includes the child to Adoption Agencies section at be adopted (for the most current www.childwelfare.gov. information on this topic, see the U.S. Citizenship and Immigration Services’ HHS Poverty Guidelines for Affidavit of Support form at www.uscis.gov)

12 l Ask the state or county social services department for the name of the How Long Will government entity that oversees It Take? adoption to verify the reputation of the adoption agency, lawyer, All prospective adoptive parents usually or intermediary. feel they are “waiting parents.” Adoption can be a long, slow process. During the l Talk to parents who have adopted beginning stages, it can seem a bit over- and members of adoptive parent whelming and some adoptive parents support groups to get recommenda- begin to wonder if the process is worth it. tions (or warnings) about the adoption It is important for prospective parents to entities in the area. try to be patient and remember that they Affordable Option an l Clarify upfront and in writing exactly can have a positive effect on the life of what the stated adoption fee will a child. cover—and what it will not cover The time it takes to bring a child home throughout the adoption process. varies greatly depending on the type Some agencies, lawyers, and inter- of adoption and any unforeseeable mediaries may quote a certain fee, but circumstances that may arise in day-to- later add other charges such as post- Adoption day activities. Here are some possible placement fees and court costs. timetables: l Ask about payment schedules. • : Several months up Do not pay 100 percent of the adoption Healthy infant to seven years costs in advance. Payments should be made as each step of the process • Waiting child: Four months up to is completed.

18 months How to Make l Be wary of agencies, lawyers, and • Intercountry: Six months up to intermediaries that charge high 24 months fees, want a retainer paid in full upon application without any provisions for Finalizing an adoption usually occurs six a refund, guarantee a child, or want months to one year after placement. disclaimers signed before meetings or searching for a child.

13 ADOPTION EXPENSES

Adoption expenses vary depending on the type of adoption preferred and the agency, lawyer, or intermediary selected. Most adoptions, however, involve a combination of fees, home study expenses, legal costs, and miscellaneous expenses (such as travel and paperwork). The expenses common to most adoptions are listed here; for additional possible expenses, see Expenses Related to Specific Adoption Types on page 18. Keep in mind that many financial resources are available to help with these expenses as discussed in Financial Resources for Adoption Expenses starting on page 27.

14 • Many agencies assisting in adoptions of Adoption Fees children in foster care may not charge a fee for the study. If these agencies do Adoption fees encompass various costs charge a fee, often it is around $300 to of working with a public adoption agency, $500. After the adoption is finalized, the private adoption agency, lawyer, or other fee often is reimbursed. intermediary. Generally, adoption fees include the costs of a home study, • If adoptive parents live overseas, are pre-adoptive counseling, identifying a pursuing an independent adoption, child for the family, placement fees, and or have an independent professional post-placement visits. (usually a licensed social worker in private practice) perform the home an Affordable Option an • Waiting child: Adoptions for children study, the fee could range from waiting in foster care may involve $1,000 to $3,000 for the home study. only minimal costs and often are free of charge. The home study fee may include other services, such as an application fee and • Independent adoption: For an in- pre-placement services. Be sure to dependent adoption, the birth mother’s understand what the fee covers and living and delivery expenses may be what it does not cover, and ask for this Adoption included or may be separate expenses. information in writing. • Intercountry: For an intercountry adoption, the adoption fee may or may Parenting or Adoption not include the costs of visas, dossier Information Classes preparation, document translation, and other expenses unique to adopting Adoptive parents may be required to children from other countries. take parenting or adoption information How to Make classes as part of the home study Fees charged by private adoption process. A registration fee to cover the agencies and intermediaries can range costs of materials may be charged as from $5,000 to as high as $40,000, and part of the adoption process. Even if the possibly more. Be sure to understand classes are not mandatory, they may which services in the adoption process provide helpful information. are included and which are separate expenses. For more information, see Home Study Updates the Costs of Adopting fact sheet at Home studies are considered current for a www.childwelfare.gov. limited time period, often six to 18 months. Many states require home studies to be updated after a year. Depending on the Home Study type of adoption, it may take years to adopt a child. Therefore, the home study Expenses may need to be updated multiple times during the wait. Ask the agency that per- The cost of the home study usually is forms the home study about the costs for included in the adoption fees, but it can be updating it. a separate cost in some cases. The home study fee depends on the type of adoption.

15 The home study also needs to be updated Citizenship Act, naturalization is now for any subsequent adoptions, particularly automatic at the time of finalization. if several years have passed or if the Even when the adoption is finalized in adoptive parents use a different agency, the birth country, many families choose lawyer, or intermediary. to re-adopt the child in the United States so they can share that important day with family and friends, in addition to getting a birth certificate in English. The Legal and intercountry adoption agency should be able to specify where the finalization Court Costs needs to occur during this process. The majority of adoptions involve legal For more information, see The Child and court costs for finalizing the adoption. Citizenship Act of 2000 fact sheet on In some cases adoptive parents may the U.S. Citizenship and Immigration face costs for terminating the biological Services’ website at www.uscis.gov. parents’ rights or even for contending with a legal challenge to the adoption. Terminating the Biological Parents’ Rights Finalizing the Adoption For a child to be legally adopted, the Adoptions are finalized as follows: biological parents must voluntarily and legally relinquish their parental rights, • Domestic adoption: All domestic or the courts must terminate their adoptions must be finalized in a rights involuntarily. When a child is state court. adopted the court creates a new legal • American Indian child adoptions: relationship between the child and the When adopting an American Indian adoptive parents. child, the tribe needs to be notified as • The adoptive parents are not required by the Indian Child Welfare responsible for the court costs related Act. In some cases the adoption must to involuntary termination. See the be finalized in an Indian tribal court Grounds for Involuntary Termination because reservations and pueblos are of Parental Rights section at sovereign nations. In addition, specific www.childwelfare.gov for tribal laws and procedures will need more information. to be followed. For details, see the Indian Child Welfare Act section at • In some intercountry and independent www.childwelfare.gov and the adoptions the adoptive parents may Resources section on the National have to pay the legal costs of terminat- Indian Child Welfare Association’s ing the rights of the biological parents. website at www.nicwa.org. It is important to be sure that the parental • Intercountry: Most intercountry rights of both biological parents have adoptions are finalized in the child’s been relinquished or terminated before country of origin. However, in some adopting a child. Often, the adoption cases the intercountry adoption must be cases that receive media attention result finalized in the United States. For an from parental rights that were not correctly intercountry adoption, under the Child terminated during the process.

16 Legal Challenges l Preparing for international travel, such as getting immunizations to Adoption and passports Legal challenges to adoption are rare. l Paying for travel, accommodations, If an adoptive placement is challenged, and meals for possible long stays in however, the legal expenses for the other countries for intercountry adoptive family can be extremely high. adoption Adoptive parents can take financial steps, such as establishing an emergency fund, to reduce the financial impact of a legal challenge to the adoption. Adoptive Transfer Costs parents should carefully proceed through Affordable Option an the steps of the adoption process to Sometimes, adoptive parents must move reduce the likelihood of a legal challenge as a result of a job transfer or military in the first place. The safest way to avoid reassignment before completing the expensive court battles is to be certain, in adoption process. In the best situations advance, that the adopted child is legally the adoptions can be completed if the free to be adopted—meaning that the initial adoption agency is willing to parental rights of both biological parents collaborate with the adoption agency in Adoption have been relinquished or terminated in the new location. Otherwise, adoptive or by the courts. parents may need to start the adoption process over. In either case new adoption expenses may be incurred. Adoption fees already paid to the Miscellaneous original adoption agency often will not

be refundable because that work already How to Make Expenses has been completed. If a move appears likely during the adoption process, clarify Throughout the adoption process various this in advance with the agency or out-of-pocket expenses may arise. adoption facilitator. Although these costs usually are minor, it’s best to be prepared for them. For example, consider the costs related to the following possible activities: l Traveling to and from the office of the adoption agency, lawyer, or intermediary l Completing and photocopying records and other paperwork l Taking time off work for interviews and home studies l Arranging for child care for any children in the household

17 EXPENSES RELATED TO SPECIFIC ADOPTION TYPES Many adoption expenses, such as court costs, are common to nearly all adoptions. (Those expenses were discussed in the previous section, Adoption Expenses.) Waiting child, independent, and intercountry adoptions, however, have additional possible expenses. Prospective adoptive parents can learn about these expenses in this section. In many cases financial resources are available to help with these expenses as discussed in the Financial Resources for Adoption Expenses section starting on page 27.

18 in another community, perhaps even in Waiting Child another state, parents probably will be Adoption expected to travel at least once, and often several times, to the child’s place of Waiting children are defined as children residence. See the Adopting Children who are legally available for adoption and from Other States or Jurisdictions section whose parents have had their parental at www.childwelfare.gov for details. rights terminated. Although adopting a Although the child’s agency may help child waiting in foster care may involve with some of the costs for transportation, little or no direct expense, some other food, and lodging, parents probably will expenses are unique to this type need to cover some of these costs. of adoption. Affordable Option an Counseling Expenses Expenses Related to Many waiting children have experienced Finding a Child severe emotional trauma from abuse, neglect, or abandonment. Most have Many children are waiting for good suffered multiple losses of important homes. To find a waiting child an people in their lives, such as birth parents,

adoptive family might: Adoption siblings, other relatives, and loving foster l Work with a social worker at a public families. Therefore, individual and/or agency to find a child in foster care family counseling may be helpful—and who might fit into the family. even necessary. Some families will need only short-term counseling to help them l Check out local waiting children get through the initial adjustment period, featured on television and in or sporadic counseling as the child goes newspapers. through different developmental stages How to Make (particularly adolescence). Other adopted l Review photos and listings of children and their families may need waiting children on adoption exchange long-term counseling. and adoption agency websites. l Register with an adoption exchange Medical Expenses for its child-matching program. The Children with physical disabilities or exchange may charge a nominal medical conditions may require expensive amount for subscribing to its photo treatment or ongoing care. Children who listing book to help with identifying have experienced abuse and neglect in a child. Some exchanges also their birth families, as well as losses and offer waiting adoptive families the disruptions in foster care, often have opportunity to be featured in the emotional and learning problems that photo listing book for a nominal fee. respond to short- or long-term treatment. Although the family’s health care plan Pre-Placement likely will cover many of these costs, Visit Expenses consider the co-pays and time involved. Prospective adoptive parents usually will In addition, some medical costs may not visit a waiting child several times before be covered. bringing the child home. If the child lives

19 2. Have realistic expectations about the Independent role of a lawyer. The lawyer should Adoption provide competent legal services, but should not be relied on to perform An independent adoption involves a hand-holding through the adoption third-party intermediary, such as a lawyer process. Other professionals or doctor, who helps a birth mother and and support groups can fulfill family find each other. This type of this need. adoption may involve agency, legal, 3. Ask the following questions: birth, and adoption expenses. l What is the average cost of the Expenses Related adoptions you have handled? to Finding a Child l Do you charge a flat fee or bill Independent adoptions often involve a by the hour? search fee if the intermediary identifies l If a flat fee, what does that fee a pregnant woman who is considering include? Home study? Matching placing her infant for adoption. If not, with a birth mother? All legal fees? adoptive families may need to locate a Counseling services? Advertising? potential birth mother on their own, which can involve the cost of advertising l Are expenses, such as the through want ads on the Internet or preparation of letters and in newspapers. (Confirm that such documents, photocopying, advertising is legal in the state.) telephone calls, and postage, Sometimes adoptive families add a charged separately? separate phone line for responses from l birth mothers. For more information, see Is a retainer fee required upfront? the Use of Advertising and Facilitators in If so, how much is it? Adoptive Placements fact sheet at l If the birth mother changes www.childwelfare.gov. her mind, what happens to the retainer fee? Legal Expenses 4. Come to all meetings prepared, A lawyer is required for completing an with papers organized and a list of independent adoption. Here are some questions prepared in advance, suggestions to help ensure reasonable since lawyers generally charge legal fees: by the hour. 1. Hire a lawyer who is experienced in handling adoptions. Do not select a Birth Expenses lawyer just because he or she is a In an independent adoption, the adoptive friend or because friends have used family generally is expected to pay for his or her services, unless they used some or all of the prenatal and birth this lawyer for an adoption and were expenses of the birth mother who is satisfied with the lawyer’s fees and planning to place her child for adoption. services. Do not pay an inexperienced In some cases the adoptive family also lawyer to learn on the job. may be expected to pay reasonable living expenses, including rent and clothing, for the birth mother.

20 Adoption Insurance l Multiple agency fees, which may result Expenses in higher costs* l Sometimes the birth mother or birth Re-adopting the child in the United parents terminate the adoption process States (many adoption professionals before it becomes final. If this happens, advise re-adopting the child in the the adoptive parents may find themselves state where the family resides) unable to recover their expenses. In l “Donation” fees to help pay for the some cases it may be possible to buy foreign country’s institutionalized adoption insurance to protect against children financial loss. Ask an adoption expert or l insurance professional for information, Foster care for the child in the foreign Affordable Option an or see the Adoption Insurance Expenses country during the adoption process section at www.adoption.com. l Treatment for medical problems, such as parasites or skin disorders, diagnosed after the adoptive child Intercountry arrives at his or her new home

Adoption *In most cases the adoption fee will cover Adoption the services provided by the agency doing Intercountry adoptions involve children the home study, as well as those of the who were born in (or are a national or agency providing placement services. citizen of) a country other than the United All agencies, however, do not work with States. An intercountry adoption requires all countries, so the selected agency may numerous steps that may or may not be collaborate with an agency that does work

included in the agency’s overall adoption with the adoptive child’s country. How to Make fees. In addition, different countries have different adoption requirements that Paperwork Expenses you can research. For more information, see the Intercountry Adoptions from A–Z Intercountry adoptions may generate booklet and the Learn about a Country paperwork in addition to what is required section on the U.S. Department of State’s by the home study. In most cases during Intercountry Adoption website at the home study prospective adoptive www.adoption.state.gov. parents will be fingerprinted and submit proof of U.S. citizenship, a marriage certificate and/or divorce papers, Legal, Agency, and evidence of financial support, and a Child Care Expenses medical exam. An intercountry adoption Intercountry adoptions can get more also may require: expensive because prospective parents l Passports, visas, and immunizations may be dealing with multiple lawyers and agencies, along with expenses related l Document translation services to caring for the child before and after l adoption. These expenses may include: A birth certificate and Social Security number for the adopted child l Foreign lawyer fees and court costs

21 Travel Expenses Kinship/Relative Travel expenses include planning for transportation, food, and lodging Adoption expenses for all members of the adoptive family who are traveling to the child’s When both parents terminate their country. Some countries require adoptive parental rights, a relative can adopt a parents to stay only a few days; others child. (The definition of “relative” varies require that at least one of the adopting by state law.) The adoptive relative parents stay for up to eight weeks to be becomes the legal parent and can make approved as an adoptive family by local decisions on behalf of the child. Adoption officials. Consider buying travel insurance by relatives can provide a sense of to account for unforeseen circumstances continuity in a child’s life since the family such as natural disasters. connection remains intact. As with other types of adoption, Potential Risks relative/kinship adoptions present some Intercountry adoptions do present issues that adoptive parents need to financial risks. A country’s leaders consider: may decide to close its doors to outside • Home study: Often, the pathway to adoptions, or they may change the adoption is streamlined for adoption requirements for adoptive individuals by a relative. Depending on the state, or families. Adoptive parents who are in the home study may be shortened or the middle of the adoption process could not required at all. (Note that the home lose money and be unable to complete study process often is streamlined for the adoption of a child they already stepparent adoptions as well.) have selected. • Income: What is the source of income In most cases the adoption agency and is it sufficient to raise the child? involved will be aware of impending changes in a particular country, usually • Lifestyle: How will the adoption affect before a specific child has been identified, the adoptive parents’ work life and and redirect prospective parents to home life? Does the adoptive parent another country. At that point they may have the time to raise a child? face costs for additional paperwork required by the new country. • Longevity: Can the adoptive parent manage to raise the child and still plan for a financially stable retirement? For more details, see the Adoption by Family Type: Kinship/Relative Families section at www.childwelfare.gov.

22 POST-ADOPTION EXPENSES Most post-adoption expenses are the normal expenses of raising a child. For new parents, these costs can be something of a shock. The U.S. Department of Agriculture estimates that it costs the average, middle-income family $234,900 to raise a child from birth through the age of 17, not including the cost of higher education (see the Expenditures on Children by Families, 2011 report at www.cnpp.usda.gov). There are some expenses, however, that are specific to raising adopted children. Assistance may be available for help with these expenses.

23 Preparing for a Child Typical Child-Raising Expenses When a new child comes home, he or she is likely to need furniture, bedding, towels, To review the current costs of raising a and clothing (particularly if the child is child (whether biological or adopted), from a different climate). In addition, use the Center for Nutrition Policy and adoptive parents may want to give the Promotion’s Cost of Raising a Child child special welcome toys or gifts. Calculator on the U.S. Department of Consider the following preparations Agriculture website, www.cnpp.usda.gov. for specific cases: Typical child-raising expenses generally • Infant: When adopting an infant, include the following: first-time adoptive parents usually are l Food and clothing excited about decorating the nursery. l Furniture • Older child: An older child joining a l family may want to be involved in Child proofing the home decorating his or her room. Adoptive l Health care coverage and co-pays parents probably will want to do some preliminary window shopping to narrow l Medical expenses not covered down the choices to fit their budget. by insurance l Child care • Child with physical disabilities: When adopting a child with physical l Books, games, and toys disabilities, make any necessary l Computer, software, and modifications to the home (such as computer games adding a wheelchair ramp). l Cellphone and service • Siblings: When adopting siblings, consider whether it’s necessary to add l Activities such as clubs, sports, a bedroom or bathroom to the house, camps, and music lessons move to a larger home or apartment, l Bicycles and other sports equipment or buy a larger vehicle. l Transportation l Vacations l Religious ceremonies Personal Records l Allowances and Health Care l Driving lessons Many new stages of life require l Car and car insurance paperwork, and completing a new l adoption is no exception. The adoptive Counseling and tutoring child will need a birth certificate, Social l College, technical school, or Security number, health history, and vocational school health care coverage as soon as possible.

24 Birth Certificate Note that under federal law employer- provided health plans must treat an Once the adoption is finalized, adoptive adopted child as a birth child. The child parents should obtain a new birth should be added to the family’s plan certificate for the child. The birth within 30 days of adoption or placement certificate is likely to cost less than $50. for adoption. The adopted child may not be excluded from coverage because of Social Security Number pre-existing conditions as long as the The adoptive child will need a Social child is added to the plan within 30 days Security number so parents can claim a of becoming eligible. For details, see dependency exemption on their federal the Protections for Newborns, Adopted

income tax return. Adoptive parents can Children, and New Parents section on Affordable Option an obtain the child’s new Social Security the Department of Labor’s website number before the adoption is complete. at www.dol.gov. They may want to wait, however, and Also read more about health plan apply for a Social Security number using coverage of adopted children at the the child’s new name. Department of Health and Human Services website, www.hhs.gov, and Immunization search for the Affordable Care Act. Adoption and Health History Most states have similar legislation Adoption agencies provide the adoptive that includes both individual and child’s medical history and immunization employer-provided health care coverage. information. For an independent adoption Each state’s department of insurance this information may or may not be should be able to clarify state laws.

available, but it should be requested How to Make with the child’s records. Health Care Coverage Services Adoptive parents should add the new Adoptive children may require special child to their health care plan as soon as services such as tutoring, special he or she moves into the home. They do education, and counseling. Waiting not have to wait until the adoption is children in particular may need this type legally finalized to add the child to the of support, but other adoptive children family’s health care plan. In fact, health may need special services as well. care coverage must be provided from Consider the possibility of facing these placement, which is defined as the time expenses while planning for adoption. an adoptive parent assumes full or partial financial responsibility for the child. Although adding a family member to Tutoring a health care plan may increase the Children living in a foster care setting monthly premium, it’s important for often are as much as two grades behind adoptive parents to remember that they their peers because of frequent moves are responsible for the child’s health care before or while in foster care. In addition as soon as the child joins the family. It’s they may have experienced a general lack critical that the child be included in the of attention to their education. Tutoring family’s health care coverage before the may be required so these children can adoption is finalized. catch up with their peers.

25 Special Education Impact of Institutionalization section at www.childwelfare.gov for more information. As with all children, adoptive children may have learning disabilities or challenges Adoptive parents and any children they that call for special education classes, already have also may face significant physical therapy, speech therapy, or adjustment challenges. Thus, counseling occupational therapy. In most cases could be an appropriate choice for all schools are required to provide any concerned. In some instances, there additional services the child may need may be a need for crisis intervention or, as part of his or her education. However, infrequently, a child may need to be a child may need more than the school placed in a residential treatment center can offer. If the parents’ health care for intensive therapy. plan or adoption subsidy does not cover some of the costs, the responsibility for Although health insurance, medical payment of these extra services may subsidies, and government agencies be theirs alone. may underwrite some of these costs, counseling can be a high out-of-pocket Counseling expense for adoptive parents. See the Parenting After Adoption and Finding Waiting children may be moved frequently Services for an Adopted Child pages among foster homes or institutional at www.childwelfare.gov. settings, and they may have suffered emotional, physical, or sexual abuse. Because of these experiences, they may have a difficult time adjusting to a new home and new parents. The children and families may need counseling at different times throughout the childhood years to help them deal with the effects of traumatic experiences before the adoption. Intercountry adoptees also may face tremendous cultural, language, and emotional challenges. Children who have spent their early years in orphanages may have special emotional problems. Even healthy infants have adjustment difficulties or other adoption-related issues that may, at some time, require counseling as a post-adoption process. See the

26 FINANCIAL RESOURCES FOR ADOPTION EXPENSES The federal government, state governments, the military, employers, and adoption agencies may offer various forms of financial assistance for adoptive parents ranging from lower taxes to outright reimbursement of expenses. Note that financial assistance is available for all types of adoption with a few exceptions related to intercountry adoptions. Generally, a higher level of assistance is available for waiting child adoptions.

27 l Expenses allowed as a credit or Adoption Tax Credits deduction under any other provision Adoptive parents may be able to claim of federal income tax law a tax credit on their federal income tax return for qualified adoption expenses. Claiming the Adoption The adoption tax credit changes each Tax Credit year. Visit www.irs.gov and search for Individuals who adopt may be eligible Adoption Credit. Some states offer a for tax credits or income exclusions. similar tax credit, so adoptive parents The amounts may change annually, and should do research before filing state the rules have changed dramatically in taxes each year. recent years. All adoptive parents should visit www.irs.gov for details. Consult a tax Qualified Adoption professional before filing your returns. Expenses To claim the refundable adoption tax As of this writing, the adoption tax credit credit, use IRS Form 8839. Consult the applies to families that have federal instructions for details to include one or income tax liability. However, the credit more adoption-related documents (see is not refundable, meaning that an Form 8839 instructions for acceptable adoptive parent may be able to claim documentation) to support the claim. the credit for qualified expenses even Keep the following in mind: if no taxes are owed. Qualified expenses include the following: • Adoptions that are not yet final: The adoption tax credit can be claimed l Adoption fees for domestic adoptions that are not l Lawyer fees and court costs yet final. l Travel expenses, including meals and • Intercountry adoptions: Intercountry lodging, while away from home adoptions must be finalized before a parent can claim the adoption tax credit. l Re-adoption expenses related to adopting a child in another country • Interrupted/stopped adoptions: Adop- tive parents can claim expenses for an adoption that is stopped, but the amount Nonqualified is applied to the maximum amount that Adoption Expenses may be claimed on a second adoption. The following are not allowed as qualified • Waiting child adoptions: When adopt- expenses for the adoption tax credit: ing a domestic waiting child (referred l Funds received under any state, local, to as a “special needs” child in IRS or federal program publications), individuals may be eligible for a certain amount of credit or income l Costs that violate state or federal law exclusion even if no out-of-pocket expenses were paid or incurred. l Expenses related to carrying out a Note: a child who receives an adoption surrogate parenting arrangement subsidy (typically from some type of l Costs of adopting a spouse’s child caretaking agency) is considered a child with special needs by definition. l Funds paid for or reimbursed by an employer or any other person or organization 28 • High-income family adoptions: The Exception for adopted child. If you are adoption tax credit begins to phase out a U.S. citizen or U.S. national who has for taxpayers with modified adjusted legally adopted a child who is not a gross income in excess of $194,580; U.S. citizen, U.S. resident alien, or it is completely phased out for those U.S. national, this test is met if the whose modified adjusted gross income child lived with you as a member of exceeds $234,580 (as of 2013). your household all year. This exception also applies if the child was law- For complete details, see the Topic 607: fully placed with you for legal adoption. Adoption Credit and Adoption Assistance l Programs section, the Form 8839: Quali- For an intercountry adoption, the child must have lived with the adoptive fied Adoption Expenses document, and Affordable Option an Instructions for Form 8839 document family for the entire tax year. Even if at www.irs.gov. the adoption is not finalized, the exemption is valid if the child was lawfully placed with the adoptive family for legal adoption. Income Tax Adoptive families must provide more than

Dependency half of their adoptive child(ren)’s support Adoption to list them as exemptions. Some adopted Exemption children receive subsidies, which may provide more than half of their support. An income tax exemption reduces taxable For example, if a child receives $5,000 income, and therefore possibly reduces a year in subsidies, the adoptive family the amount of taxes an individual or family must provide $5,001 or more a year in pays. The dependency exemption applies support to claim the child as a dependent. How to Make to adoptive children as well as biological For complete details, see the Exemptions children. The amount of the dependent for Dependents section in Publication 501 exemption is adjusted annually to reflect at www.irs.gov. the cost of living. For 2014, the personal exemption is $3,950. The dependency exemption applies differently to domestic and intercountry adoptions. Assistance/Subsidies l For domestic adoptions, parents may and Taxable Income take the dependency exemption for children placed with them for adoption Note that adoption assistance funds but not yet finalized. provided by the federal or state government, an employer, or the military are not You generally cannot claim a person considered taxable income. In addition, as a dependent unless that person adoption subsidies for the ongoing care of is a U.S. citizen, U.S. resident alien, a child are not considered taxable income. U.S. national, or a resident of Canada or Mexico. However, there is an exception for certain adopted children, as explained next.

29 Financial Resources Assistance with Nonrecurring Adoption for Waiting Child Expenses Adoptions One-time, out-of-pocket expenses for “reasonable and necessary” costs directly Federal and state governments offer related to adoption may be reimbursed to financial assistance with the costs of adoptive families. These may include adopting and caring for waiting children. adoption fees, court costs, lawyer fees, Qualified one-time expenses may be required health and psychological reimbursed. For long-term care, adoption examinations, transportation, and subsidy programs ensure that the reasonable costs of lodging and food adoptive families of waiting children for the child and/or the adoptive have the necessary services and parents, when necessary, to complete financial resources to meet their the placement or adoption process. child(ren)’s ongoing needs. The federal government allows states to Check with the child’s agency to be reimburse up to $2,000 in nonrecurring sure to understand when each type of expenses, but many states have set assistance is available and what is lower amounts. The state determines the required for the plans to stay in child’s eligibility and issues the adoption effect. Be sure to apply for subsidy assistance payments. Case workers can agreements in writing before help families by identifying which the adoption becomes final. expenses are covered, how much is allowed by the state, and how to process claims for reimbursement. Adoptive families that are denied a government subsidy or believe the subsidy is inadequate can appeal the decision through the appropriate state agency. Note that the reimbursement of adoption expenses must be agreed upon before the adoption is finalized, and may not include expenses reimbursed to the family through another source, such as an employee benefits program. For details, search for “nonrecurring expenses” at www.childwelfare.gov.

30 Title IV-E Adoption Assistance with Assistance Programs Medical Expenses Many children waiting in the foster care Children who qualify for Title IV-E system are determined to have special adoption assistance are automatically needs and many are eligible for some eligible for Medicaid benefits. States also type of adoption subsidy. In 1980, the may choose to provide Medicaid coverage U.S. Congress enacted the Title IV-E for children who do not qualify for the program to remove financial barriers to federal adoption assistance program. adopting waiting children. In some cases a child’s need for medical coverage is not apparent at the time of the Although the assistance is federally

adoption. For children who have been in Affordable Option an funded, individual states determine which foster care, particularly, medical problems children qualify. Adoption subsidies and that were not fully recognized or disclosed their amounts are decided on a case- by the child welfare agency may appear by-case basis and the needs of the child. later and require long-term and expensive The adoptive family’s financial resources treatment. In addition, the effects of have no bearing on a child’s eligibility multiple foster care placements, as well for Title IV-E adoption assistance. as a history of abuse and neglect, may Subsidies are reviewed periodically, make the need for medical coverage for Adoption depending on each state’s policy. mental health care equally important. According to the North American Council on Adoptable Children, several criteria Even if an adoptive family is certain that must be met to qualify for the Title IV-E its health plan will be adequate, it is adoption assistance program: critical to arrange for the full amount of Medicaid assistance available before

1. The court must have ordered that the finalizing the adoption. Even though a How to Make child cannot or should not be returned family may never need to use Medicaid home to the birth family. or other benefits of the adoption subsidy 2. A child with special needs, as programs, it is important that all possible determined by state definition. resources be available in case the child or family eventually does need help. 3. The child could not be placed for adoption without a subsidy. Assistance from Social Services Under Title XX of the Social Security Act, adopted children with special needs may be eligible for social services benefits if there is an adoption assistance agreement in effect for the child. With the help of social workers, adoptive families can identify post-adoption services that will help the adoption succeed. Such services may include specialized day care, in-home support such as house- keeping and personal care for the child,

31 and counseling. In some cases individual Military Assistance counseling for the child may be covered while family counseling is not, and partial for Adoption costs for some services may have to be The U.S. military provides various met by the adoptive family. It is important resources for helping parents adopt and to know that Title XX funds are limited and care for a child. may not always be available in each state • : Active-duty service members at a given time. Leave are allowed up to 21 days of leave in addition to regular leave to be used in connection with an adoption. As with Military Subsidies any leave, this is granted at the discretion of the commander. Military The military will reimburse active-duty families are not eligible for leave under personnel for qualifying costs up to the Family and Medical Leave Act $2,000 per child for domestic or inter- (FMLA). country adoptions performed through • : The military provides a state or nonprofit adoption agency. Health care health care for adopted children through (Independent adoptions and adoptions TRICARE® health care, which covers performed through for-profit adoption U.S. military families worldwide. agencies do not qualify for military reimbursements.) The military reimburse- • Children with Disabilities: ment is limited to $5,000 in a given year, The military’s Exceptional Family even if both parents are in the military. Member Program (EFMP) helps ensure a disabled child’s needs are considered Claiming the Adoption during the military personnel Reimbursement assignment process. For details, visit the Department of Defense’s To claim the reimbursement, submit a Military OneSource website at DD Form 2675 no later than one year www.militaryonesource.mil and search after the adoption is final. Fees that can for EFMP/Special Needs. be reimbursed include adoption fees; placement fees (including fees for birth parent counseling); legal fees and court costs; and medical expenses, including Employee Benefits hospital expenses for the biological mother and her newborn infant. For more Programs information, visit the National Military Family Association website at The number of employers who offer www.militaryfamily.org. Go to Your adoption benefits has risen gradually Benefits, and then go to Adoption. each year. In Aon Hewitt’s annual survey of 1,000 major U.S. employers, only 12 percent offered a financial adoption benefit in 1990. In 2013, the number rose to 52percent. Employers that offer adoption benefits cite various advantages

32 for their companies, including worker Even if an employer currently does not productivity, employee retention, offer adoption benefits, ask about benefit a positive public image, and equity in availability. Adoptive parents may be benefits for all employees, according to able to persuade the company to begin employer surveys by the Dave Thomas offering them. Work with other employees Foundation for Adoption. interested in adoption, gather information for the employer, and present the case. For information about adoption benefits available to employees of the federal The Dave Thomas Foundation for Adoption government, see the Guide to Adoption website at www.davethomasfoundation.org and Foster Care Programs for Federal offers a great deal of information about adoption-friendly employers and adoption Employees booklet on the U.S. Office Affordable Option an of Personnel Management website at benefits for both employers and www.opm.gov. For state government employees. Go to Free Adoption employees and private corporations, Resources and then Adoption Benefits. check with the employer to find out which types of adoptions and which expenses qualify for adoption benefits. Federal Family and Adoption In addition to reimbursing some adoption Medical Leave Act expenses, an employer may provide benefits such as: Unpaid leave under the federal Family l and Medical Leave Act (FMLA) allows Paid leave, in addition to or including individuals to take up to 12 weeks off vacation time, sick leave, or (unpaid but with benefits) without jeopard- personal days izing employment. The leave is available How to Make l Unpaid leave (personal, hardship, for anyone who works for a company with medical, or child care) that may range 50 or more employees. from three to 12 months Although the leave is unpaid, FMLA can l Medical expenses for the birth mother provide valuable time for a newly adoptive family. Adoptive families planning to use l Adoption seminars and FMLA may want to have a financial plan information classes in order to fund this time off. Some states l require employers to offer their workers a Employee adoption networks minimum amount of parental leave time. l Counseling and support before and after placement l An Employee Assistance Program (EAP) that helps employees deal with personal situations or problems such as the stress and anxiety that may arise during the adoption process

33 Sliding-Scale Fees Tip Families need to keep in mind that they can lose their house if they Some private adoption agencies offer cannot make payments on a home reduced fees based on the adoptive equity loan. family’s income. In the case of a waiting l child, most offer sliding-scale fees and Private grant and special loan some require no fees. Some adoption programs agencies may reduce fees for low-income Tip The National Adoption Foundation families adopting older children or children offers direct grants, unsecured loans, with special needs from another country. and credit cards to select adoptive When considering an adoption agency, families. For more information, visit ask if the agency offers sliding-scale fees. www.nafadopt.org and go to Fund Your Adoption. Loans Loan Sources to Avoid Adoptive parents may be tempted to fund Some adoptive families may require a an adoption with a credit card or a loan loan to cover adoption expenses. In some from a retirement plan. Most financial cases the family can pay back the loan experts, however, recommend against quickly with subsidies or reimbursements. using these sources of funding. In other cases the family may have trouble repaying the loan, putting the • Credit cards: Using a credit card is family’s financial future at risk. Therefore, an easy source of funds, but the it is important to seriously consider the companies typically charge high interest risks of taking out a loan to pay for rates. Paying less than the total amount adoption expenses. It is important for due accrues interest and increases the the heads of the household to maintain total amount due—usually by a financial stability for the good of all family significant amount. members. Visit www.smartaboutmoney.org, • A retirement then search for “borrowing options.” Retirement plan loans: plan loan is a risk if it cannot be paid back in a short time period due to Possible Loan Sources unforeseen circumstances such as a Possible sources for loans to help with job change or job loss. If the loan is not adoption expenses include: repaid, it becomes taxable income that is subject to a 10 percent early l Relatives withdrawal penalty (if the parent is l Religious organizations younger than 59½ years old). The parent also loses the potential l Life insurance earnings the funds would have l achieved if they had stayed within the Low-interest loans—some banks retirement account. offer loans or credit lines for adoptive parents Dipping into future retirement savings or l running up credit card debt can add to Home equity loans, which often financial and family stress in general. feature reasonable interest rates It also could throw the family’s long- term goals and plans off course.

34 SUPPORT FOR ADOPTIVE FAMILIES Before receiving a child and after a child’s placement, adoptive family members need to be sure to take care of themselves. Adoption often is an emotionally charged experience with many highs and lows. Support Groups Parenting or Adoption support groups can be helpful Adoption Classes to families who are waiting for a child, and they are especially important following an In some cases parenting classes or adoption. These groups are designed adoption classes may be required as part to help adoptive parents cope with the of the adoption home study. Because challenges of raising adopted children by adoption has a lifelong impact on the child sharing experiences with fellow adoptive and family, many parents find it helpful to parents. Adoption agencies may help form continue to learn about adoption issues support groups; other support groups are and parenting as their children reach formed independently. Generally, the cost different stages of development. For more is minimal. information, see the Training for Adoptive Parents section at www.childwelfare.gov. To find a support group, use the When raising an adopted child, parents National Foster Care and Adoption may want to attend workshops or Directory Search tool at seminars that focus on telling the child www.childwelfare.gov/nfcad. about his or her adoption, dealing with common parenting problems (such as bed-wetting or fighting), or working effectively with teachers and the school system to be sure the child’s needs are met. Adoption agencies frequently sponsor these types of classes, and a small registration fee usually is required.

35 PLANNING FOR A CHILD’S FUTURE Bringing an adoptive child into a family can create long-term financial planning needs. Adoptive parents will need to review their wills and trusts, considering issues such as beneficiaries and special-needs trusts. In addition, adoptive parents should prepare themselves for any financial implications of a possible birth parent search.

parents should have a lawyer add the Wills and Trusts child to the will and any trusts. Mentally or physically disabled children can raise Adoptive parents need to think about unique legal and financial issues. Parents several things in relation to their wills and need to think carefully about who will take any trusts. First, they need to have a will care of the adopted child if something prepared if they do not have one. After a happens to the parents. child is placed in the home, adoptive

36 Beneficiary Birth Parent Search Designation It is natural for an adopted child to be curious about his or her biological Generally, financial planners recommend parents or siblings. Some adoptees will that parents not name their underage want to search for their roots or have a children as direct beneficiaries to reunion with their biological parents or insurance policies, retirement plans, siblings after they reach adulthood. individual retirement accounts, and other Adoptive parents should keep in mind investments. This is because state laws the financial implications of searching restrict minors’ access to their funds. for, communicating with, and visiting an Affordable Option an Individual circumstances, however, may biological parents. Costs might include call for naming a child as a primary or private investigators, lawyers, and travel. secondary beneficiary. Talk with a finan- Performing some background work at the cial planner, lawyer, or other specialist to time of the adoption can help. Consider determine the most appropriate actions. the following:

l By collecting as much background information as possible during the Adoption Trusts for Children adoption process, parents may be with Disabilities able to satisfactorily answer some of a child’s questions until he or she Families who adopt a child who might is old enough or able to get further never be self-sufficient due to a physical information independently. Some or emotional disability can arrange for a children want to search for a birth special-needs trust. To fund the trust, parent before they are 18. How to Make families have several options, which may include one or more of the following l Social media makes finding information resources: life insurance proceeds, family about a birth family easier. savings, a payout from a lawsuit, gifts l from family or friends, or assets from an Some states may make the records inheritance. A trust can be useful in available to the adopted child when he allowing family financial support for the or she is 18 or 21. Even then, state child without affecting the child’s eligibility laws vary considerably regarding the for federal Supplemental Security Income circumstances under which information (SSI) benefits. Consult an experienced can be released after the adoption. lawyer and financial planner for guidance l Other states keep records through the complexities of trusts. permanently sealed unless a court order mandates that the records be opened for the adopted child. For more information, visit www.childwelfare.gov, go to Adoption and then Search and Reunion.

37 CONCLUSION

With careful research and planning, along with support from professionals, whether in a public or private capacity, families can learn to manage the financial side of adoption. A variety of federal and state government resources are available, and many employers offer assistance. Financial concerns need not discourage prospective adoptive individuals, couples, and families from welcoming a new child.

38 ❏ Seek and apply for financial assistance such as adoption loans, government assistance, and employer assistance. ❏ Prepare the home for the arrival of the child. ❏ Add the child to the family health plan. ❏ Finalize the adoption. (In the case of intercountry adoptions, re-adopt the child in the state of residence.) ❏ Get a Social Security number for the child. ❏ Get a new birth certificate for the child. ❏ Affordable Option an Update the adoptive parents’ wills, life insurance policies, and other appropriate documents. ❏ Join an adoptive parent support group. ❏ Identify an adoption therapist if needed. ❏ Plan for a trust if the child has special needs.

RESOURCES Adoption Adoption Checklist Adoption Information ❏ Read as much as possible about adoptions. Adopting.org: www.adopting.org ❏ Talk to friends and acquaintances AdoptUSKids: www.adoptuskids.org who have adopted. ❏ American Academy of Adoption Attorneys:

Attend orientation sessions at public www.adoptionattorneys.org How to Make and private adoption agencies. ❏ Child Welfare League of America: www.cwla.org Decide what type of adoption is most Dave Thomas Foundation for Adoption: appealing, and review its features www.davethomasfoundation.org and drawbacks. ❏ International adoption clinics and doctors at Interview several adoption agencies the Child Welfare Information or similar intermediaries. ❏ Gateway: www.childwelfare.gov Clarify and compare adoption fees. ❏ National Military Family Association: Estimate all other potential expenses. www.militaryfamily.org; ❏ Earmark funds and add to savings go to Your Benefits, then Adoption accounts for potential expenses. North American Council on Adoptable ❏ Maintain adequate family emergency funds. Children: www.nacac.org ❏ Continue saving for retirement. The Adoption Exchange, Inc.: www.adoptex.org ❏ Avoid borrowing from retirement savings. NEFE Smart About Money: ❏ Maintain or increase life insurance www.smartaboutmoney.org; coverage. search for Adoption ❏ Inform employer and ask if the company U.S. Department of Defense, offers adoption benefits. Military OneSource: ❏ www.militaryonesource.mil; Apply for an adoption. ❏ search for Adoption Have a home study conducted. ❏ U.S. Department of Health and Human Begin the search for a child. Services, Child Welfare Information ❏ Select a child. Gateway: www.childwelfare.gov ❏ Review and adjust expense estimates if necessary. 39 ACKNOWLEDGMENTS How to Make Adoption an Affordable Option was written and produced as a public service by the Denver-based National Endowment for Financial Education® (NEFE®).

The National Endowment for Financial Education (NEFE®) inspires empowered financial decision making for individuals and families through every stage of life. NEFE is a private, nonprofit, nonpartisan, and noncommercial foundation. For more than 30 years, NEFE has been providing funding, logistical support, and personal finance expertise to develop a variety of research, materials, and programs. For more information about the National Endowment for Financial Education, visit www.nefe.org.

The Adoption Exchange envisions a world in which all children are valued and grow up in safe and permanent families, and where families are supported in their critical roles. The Adoption Exchange is a nonprofit 501(c)(3) child welfare organization founded in 1983 to work for safety and permanence in the lives of foster children. For more information about the Adoption Exchange, visit www.adoptex.org.

The Dave Thomas Foundation for Adoption® is a national nonprofit public charity dedicated exclusively to finding permanent homes for the more than 130,000 children waiting in North America’s foster care systems. Created by Wendy’s® founder Dave Thomas, who was adopted, the Foundation implements evidence-based, results-driven national service programs, foster care adoption awareness campaigns, and advocacy initiatives. To learn more, visit davethomasfoundation.org or call 1-800-ASK-DTFA.

40 www.davethomasfoundation.org