How Will Adopting Affect Your Family’s Finances?

If you've chosen to expand your family through adoption, you are likely already aware of some of the financial barriers to this process. Whether you're adopting an infant or an older child, from the U.S. or a foreign land, you can be expected to pay legal fees, travel expenses, and sometimes even the medical expenses of the birth mother. However, there may also be some financial benefits of adoption (in addition to the priceless emotional benefits). Read on to learn more about how this process may affect your family financially.

What are some costs of adoption?

The costs of international adoption can vary widely, depending upon the country from which you are choosing to adopt -- however, the majority of international adoptions will cost you between $12,000 and $40,000. The bulk of these costs are usually travel and translation fees and payments to government officials.

The costs of domestic adoption vary based on whether you're adopting an older child (such as in a foster-to-adopt arrangement) or adopting an infant. Some costs that are consistent for both types of adoption are:

  • The home study, in which a caseworker (or sometimes the birth parents) will visit your home to ensure that you're able to provide a safe and loving environment for the child. This home study can cost between $300 and $3,000, depending on your state's adoption laws and the number of remedial actions you'll need to take to "pass" the home inspection (such as purchasing locking medicine cabinets, etc.)
  • Attorney fees. Although you can adopt without an attorney, the process is much more streamlined (and problems more easily dealt with) when you have legal counsel. Again, the extent of the family law attorney fees will vary widely, depending upon the complexity and length of the adoption. Attorney fees for an international adoption can range up to $4,000, while fees for a domestic adoption are generally lower.

You may also choose to pay medical expenses for the birth mother, if you are adopting an infant. These costs largely depend on the mother's health insurance coverage -- in some limited cases, you may even wish to make the mother a "dependent" for a brief period of time so that she can be covered under your own health insurance plan.

What are some financial benefits of adoption?

Although the costs of adoption can put a crimp in even the most expansive budgets, these costs are not without some benefits. Often, these benefits eventually supersede the costs, making an adopted child no more expensive to raise than a biological child.

  • State tax rebates
    • Many states offer tax rebates to help offset the costs of adoption. These rebates are usually only available for the tax year during which the adoption took place. If you paid medical expenses for the mother (as a dependent), these expenses may also be deductible.
  • Paid maternity leave (or job protection for unpaid leave)
    • If your employer offers paid maternity or paternity leave for the birth of a child, and this leave is not paid through a short-term disability (STD) plan, you should still be eligible for paid leave upon the adoption of a child. If your employer doesn't offer paid maternity leave but falls under the coverage of the Family Medical Leave Act (FMLA), you should be able to take off several months of leave unpaid without risking your job.
  • State payments (if a foster-to-adopt arrangement)
    • If your child joined your family through foster care, you may be able to continue receiving payments from the foster care agency after the adoption has been finalized.
  • Social Security benefits
    • Once the adoption is finalized, your child has the same right as a biological child to collect Social Security death benefits if you or your spouse pass away. These payments can be a financial saving grace for a struggling widow or widower.