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Adopting a child: Financial Considerations


The Cost of Adopting a Child

Growing your family through adoption can be a wonderful experience.  There is really no price tag on the love you share with a child.  At the same time, it is important to consider the costs associated with adopting, and they can vary significantly depending on the path you take.

Different paths to building your family

The three paths that people take to adopt children are through the foster care system, domestic adoptions or international adoptions.  Adopting a child out of the foster care system is the most inexpensive.  Children in foster care have been separated from their families and are placed in foster homes while waiting to be adopted into homes of their own.  The Child Welfare Information Gateway reported that in 2014, there were over 400,000 children in the foster care system nationwide that were available for adoption.  The cost of adopting a child from foster care can range from free to less than $3,000 if you choose to work with an attorney to complete the required paperwork.

Adopting a child through a public or private adoption agency or attorney is more expensive.  In this scenario, prospective parents make arrangements with a pregnant woman to adopt her child when it is born and agree to pay her personal expenses for a time period before and after the birth.  The typical cost of a private adoption can be upwards of $30,000, but that can vary greatly depending on how many months the adoptive parents support the biological parent, travel costs and attorney fees.

International adoption is a third choice for prospective parents and this can cost as much or more than a domestic adoption since you may have to pay to travel to the country where the adoption will take place one or more times and for extended periods of time.

Fees associated with adoption

There are various fees associated with adoption, and some apply to all adoptions, while others are specific to the type of adoption that you choose.  All families will take part in a home study, where a certified representative will visit the prospective family’s home to learn more about them and determine if a family is a good match for a child.  If the adoption takes place through the foster system this fee may be waved; in private adoptions the prospective parents will pay for the home study.  Legal fees are the other costs that are incurred in all adoptions since it is a legal procedure that takes place in the courts.  Again, the fees for adoptions that take place through the foster care system may be waived, while private adoptions may cost a few thousand dollars.

Domestic private adoptions have their own set of costs and can vary widely depending on what type of service is used.  A Licensed Private Agency will offer counseling for the birth parent, training and preparation for the adoptive parent(s), and social work services to match a child to a family.  An Independent Adoption is handled by an attorney and generally requires the adoptive parents to pay the birth mother's medical expenses as well as the associated legal fees to complete the adoption.  State law limits how much the adoptive parents will pay towards the birth parent’s support.  A Facilitated/Unlicensed Adoption is a service that tends to have costs comparable to licensed agencies and attorneys but is one that is unregulated by the states and therefore offers fewer protections to adoptive parents who may experience situations that go awry.

International adoptions are handled by various types of organizations (government agencies, government orphanages, charitable foundations, attorneys, and/or facilitators) and include assistance with immigration costs and sometimes donations to the local orphanage where the child resided.  Other related fees are travel to the country, the child’s medical care, and translation fees.

Financial assistance is available

Both domestic and international adoptions can take months to years to complete.  That also means that the expenses involved in both types of adoption are paid over time.  Unlike making a down payment on a home, you are not going to be asked to come up with $30,000 at one time.  This can make it slightly easier to manage, giving you time to save, apply for grants from community groups or nonprofit organizations; conduct fundraisers among family, friends or your community; or apply for financial assistance through employers (some large corporations will offer their employees reimbursement of some portion of their adoption expenses or maybe even direct financial assistance with adoption services).

The Federal Adoption Tax Credit is a nonrefundable tax credit (meaning that you only get it if you have a tax obligation) that is available to adoptive parents to help defray the costs of the adoption.  For adoptions finalized in 2015 the maximum tax credit was $13,400 for families making less than $201,010.  While most adopters will be required to list their adoption expenses on their tax form, parents who adopt children with special needs are able to claim the entire nonrefundable tax credit whether or not they paid any adoption expenses.  Children with special needs are defined as those being adopted out of the foster care system that are eligible for specific adoption subsidies or adoption assistance benefits.  Some states also offer additional state tax credits to their residents who adopt through that state’s foster care system.

Before you begin, get your financial house in order

Prior to commencing the process of adopting a child it is important for you to have a firm grasp on your financial situation.  Know what your assets (savings and investments) and liabilities (debts) are.  Also consider your current income and expenses.  If you are making it through the month easily and are actively saving while paying your debts and expenses, then you may be ready to pursue adoption.  If your monthly household finances seem tight then it is worthwhile to take some time to strengthen your financial position, maybe by paying down debt or adding to savings.  And while no one may ever ask to see your credit report as a part of an adoption application, you will want to pay down your debt for your own peace of mind.

Adoptive parents must not only consider the initial costs of adoption but also the costs over time of raising a child.  See our section “The real costs of having and raising a child” to learn more about the financial responsibility of raising a child from birth to age 18.

Tools to Help

Personal Balance Sheet


Cash Flow Budget Template


SMART Goal Worksheet


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What You Can Do Right Now

Information is great. But taking small steps now can lead to big changes.
  • Today
  • Take a look at your current financial situation. Use our tools “Personal Balance Sheet” and “Cash Flow Budget Template” to get down on paper your assets and liabilities as well as your income and expenses. Seeing this in black-and-white will tell you more about your current financial ability to support a child.
  • Next Week
  • Research the various adoption processes and decide which one is right for you and your family.
  • In the Next Few Months
  • Meet with an adoption agency or other expert to get a firm understanding of the costs associated with your adoption path.
  • Use our tool “SMART Goal Worksheet” to devise a savings plan to help you save for adoption expenses.
  • You don’t necessarily need to pay for all of the adoption expenses yourself. There are resources out there with missions that support adoption and they might assist you through grants or loans.