Sunday, May 4, 2014

Maryland Adoption Professionals Take Heed When Overseeing the Payment of Adoption-Related Living Expenses

This is the final post in my series about Maryland's new adoption law, which now allows adoptive parents to help birth parents with certain living and transportation expenses.  The first post in this series explained the history and need for changes in the types of reimbursable expenses allowed in Maryland, as well as the new law which took effect October 1, 2013.  My second post compared important provisions in Maryland law to laws in other states, including allowable adoption expenses, adoption consent and revocation laws, and enforceable post-adoption contact agreements, and concluded that Maryland law provides several important protections to birth parents when an adoption is finalized in Maryland.  As a result of these laws, and recent changes now allowing birth parents to obtain much-needed help with certain living and transportation expenses, I concluded that Maryland may see an increase in the number of adoptions being finalized in state.  In implementing this new law, adoption professionals finalizing adoptions in Maryland are advised to take certain measures to maintain the integrity of the adoption process. 

First, before any living expenses are paid, the birth mother must provide written documentation from her medical provider stating she is unable to work or otherwise support herself due to medical reasons associated with either the pregnancy or birth.  If a birth mother receives such written advice prior to the birth, she should obtain a separate, written note if her doctor agrees that she cannot work or support herself for a time period after the birth as well.   

Second, the birth mother must provide written documentation of the food, clothing, and housing expenses for which she is requesting assistance, and all expenses must be verified by the adoption professional or attorney for the adoptive parent(s).

Third, and most importantly, no money should be paid directly to a birth parent, particularly by an adoptive parent.   Instead, all eligible expenses should be paid by the adoptive parents' adoption professional or attorney directly to the third-party provider.  The adoption professional or attorney should establish a separate escrow account early on, after identifying and verifying all expenses of a birth parent that may be paid by an adoptive parent.  A birth parent's estimated expenses can then be collected, deposited in that account, and paid on a weekly basis if possible, directly by the adoption professional or attorney to the landlord, other third party, or if necessary for the purchase of a gift card to a grocery store or maternity clothing store.  Cash payments, even from the adoption professional or attorney, to a birth parent should be avoided.   

Fourth, the adoption professional and potential adoptive parents should maintain meticulous records documenting each and every payment, including the date, amount, payor, payee, and a description of what the payment is for.  Such records will be necessary for preparing the accounting that must be filed with the court when the adoption is finalized.   It will also be helpful when seeking the adoption tax credit -- although it will not be required to provided with your return, the IRS will likely request copies of such documentation to support the claim.  

Fifth, because Maryland strictly prohibits anyone from compensating a birth parent for placing a child for adoption, adoption professionals should counsel adoptive parents against making any payments directly to a birth parent.  This advice should be explained to them in person, and given to them in writing, preferably in the adoptive parent agreement.  Any existing adoptive parent agreement should also be amended to include a description of the terms of an escrow account and how permissible birth parent expenses will be paid and documented, and to notify their clients of the financial risks involved should a birth parent decide not to proceed with an adoption plan.  Similarly, representation agreements with birth parents should include a provision stating that they agree not to accept any payments of money or other tangible items directly from a prospective adoptive parent, and that should an adoptive parent attempt to make such a payment, that they will notify their adoption professional immediately.

It is important that adoption professionals finalizing adoptions in Maryland take certain precautions and develop procedures to ensure that no unauthorized payments are made to a birth parent that could jeopardize the adoption.  If you are an adoption professional finalizing adoptions in Maryland, what other measures are you taking  in response to these recent changes in the law, to protect the integrity of the adoption process?

Photo Credit: adamr, published on 28 June 2012.  Stock Photo - image ID: 10089068

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