5 Unexpected Finances to Think About When Adopting a Child

Every year in the U.S., there’s a waiting list of approximately 2 million couples who’d like to adopt a child. Since only around 135,000 children actually get adopted, this can make the process extremely competitive and costly.

To help offset the expenses incurred with adoption, the federal government gives applicants the ability to claim an adoption credit worth up to $14,440 per eligible child, and it can be carried over for up to five years (if the amount is greater than your tax liability). However, prospective parents can expect to spend a lot more money than this throughout the scope of the process.

In this post, we’ll explore five unexpected expenses you may want to consider before adopting a child.

1. Private Agency Costs

If a family decides to go the traditional adoption route through a licensed private agency, the process can be lengthy and include several charges. The total cost can range anywhere from $20,000 to $50,000.

Why so much? It’s because of all the functions that will be involved, including: matching, case management, counseling, support, and legal costs. Since each area will require a specialized professional, the expenses can add up quickly.

2. Advertising Fees

Outside of private agencies, some families are choosing to have an independent adoption. This is where the family will work with an adoption agency or lawyer to connect with an expecting family and adopt their newborn.

To find the right family, the adoptive parents will need to advertise themselves to prospective birth mothers. This might cost anywhere from $500 to $2,000 per month and could take up to 18 months before receiving a positive response.

3. Birth Mother’s Expenses

One of the unwritten rules when it comes to an independent adoption is that the adoptive parents will generally have to provide financial support to the birth mother. This could be for anything from medical costs to everyday expenses such as helping them with rent, groceries, utilities, cell phone service, and more. Expect to spend anywhere between $8,000 to $40,000.

4. Your Expenses to Visit the Newborn

With most independent adoptions, the adoptive parents won’t take custody of the child right away. There may be a period of a few weeks to even months before you can bring the child home with you.

During this waiting period, it’s customary for the adoptive parents to travel and spend time with the mother and her newborn. However, expenses for travel, lodging, and meals can all add up. That’s especially true if the child’s fraternal parents live in another country.

5. Life Insurance

Once you do take custody of your adopted child, you’ll want to ensure that your new family has the right amount of financial protection in case tragedy happens. For this, you’ll need an adequate amount of life insurance.

Life insurance policies typically come in two forms: term or whole life. Term is usually cheaper but expires after a preset number of years. Whole life is more expensive but has the potential to grow in value.

Depending on your budget, you might ask: Is whole life insurance worth it? This will ultimately depend on your long-term intentions with the policy. Whole life can provide lots of benefits beyond just traditional life insurance coverage. Couples should consider both options and choose the type of policy that’s best for them both now and in the future.

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