How To Finance an Adoption

The adoption process can be quite expensive, and most adoptive families do not have enough savings to cover the entire cost themselves. It is very important to realize that there are resources available; you do not have to be wealthy in order to adopt a child. Explore your financial options at the beginning stages of the adoption process. Here's how to finance an adoption:

1. Understand the costs. There are many different costs associated with an adoption. These include the agency itself, a homestudy, background checks, training or pre-adoption counseling, traveling to adopt a child in a different state or country, post-placement visits by a social worker, legal fees, attorney fees and court costs to finalize the adoption, and miscellaneous fees like obtaining documents, taking time off from work or caring for children for homestudy meetings and other adoption-related meetings. Unexpected expenses can always occur. Once you understand these costs, set an adoption budget, and stay within it to avoid overextending your family.
2. Comparison shop between agencies. Although most of these costs are fixed and non-negotiable, you can compare fees between different agencies. However, do not sacrifice service or reputability to go with the lowest price.
3. Take advantage of employee benefits. Did you know that some employers offer adoption benefits to employees wishing to adopt a child? This type of benefits is more common with larger companies and corporations, but it never hurts to ask about such benefits if you're considering adopting a child. One employer that does offer adoption assistance is the military. Active military families are eligible for a subsidy of up to $2,000 per child or $5,000 for sibling groups.
4. Adoption grants and loans. Information about low-interest loans or grants for adoption can be obtained through the adoption agency you have chosen. One such loan is the National Council for Adoption's line of credit through Bank of America, offering up to $25,000. There are a number of organizations offering grants to help defray some adoption costs. Some agencies themselves even offer sliding fees based on your income or their own payment plans.
5. Use adoption tax benefits. Once your adoption is finalized, the federal government and many individual states offer tax credits or tax breaks for adopting a child. This credit is usually seen in the year during which the adoption became final, and can range up to $11,390, depending on your personal situation. One option is to take out a short-term personal loan and pay it off with this tax credit.
6. Take out a loan. Obtain a loan from a bank to finance your adoption. A home equity loan may also be an option for paying for an adoption.

If you've decided that you want to adopt, but aren't sure where you'll get the money to finance adoption, you are not alone. The costs can range from a few thousand to $25,000 or even more. The good news is that there is help for almost all families, though you must be diligent in looking for it. Explore your financial options to find a plan that works for your situation and your family as you begin the adoption process.