No matter what your family structure, deciding to start a family is a momentous decision. But for folks in the LGBTQ community, that step can look a little different than for a cis-gendered, heterosexual couple—especially when it comes to finances. 

Given the higher potential for surrogacy and adoption, the financial impact on LGBTQ family planning can add extra layers of complexity to your situation. It’s important to get a firm handle on your financial life before taking your next steps. The good news is that, particularly with adoption and surrogacy, you can be very thoughtful about the timing and really plan for when it makes the most sense to start your family.

Here are a few LGBTQ Family Planning specific items you’ll want to consider: 

Upfront Costs

Surrogacy or adoption usually comes with a significant price tag, which makes a big impact on your household finances. Usually, you’ll need to pay cash up front in order to start either of these processes. In some cases, the upfront costs could be anything from $30,000 to $150,000. While you may have diligently saved money, it’s equally important that you don’t drain your finances. After all, paying for the new baby doesn’t stop after they arrive!

Check with your financial advisor because tax deductions might be available to you. While the tax deductions related to adoption are clear, the deduction of cost related to surrogacy are more of a grey area. A Florida couple’s surrogacy related costs were challenged just last year. 

Life Insurance

Having a baby means thinking seriously around getting life insurance. Life insurance will help protect your new family against an unfortunate event of death. A life insurance policy can serve as a replacement for you or your partner’s income, satisfy outstanding debts, provide for your child’s education, and ensure that some security for your new family.

Life insurance is also fairly affordable – for a young, healthy person, premiums for a term life insurance policy can be under $50 a month. The cost will vary depending on how much coverage you want. 

LGBTQ Family Planning: the Estate and Legal Paperwork

Another thing to jumpstart is having important legal documents and directives in place. Do you have the essential four documents ready to go? If not, now’s the time. It’s also important to start thinking about who might be a guardian for your child(ren).

Read: Estate Planning for LGBT Couples

Make sure you also consider your status as parents, especially if only one of you is the biological parent. The Family Equality Council is a great resource to learn more. If your parenting situation involves more than two people, you’ll want to research your state laws regarding the possibilities for legal parent status. Whatever the situation, LGBTQ families should attain legal counsel to help them navigate any grey areas.

Ongoing Financial Impacts

After the child arrives, you’ll need to take care of an extra (very small) person. Maybe you’ll have a nanny, maybe daycare, or maybe family helps out. The bigger question is: Have you prepared for it? Are either you or your partner taking an extended period of time off, and will it be paid? How will you accommodate the cost of child care if you need it? Will having a baby mean you can’t save for another goal that was on your horizon? Whatever the circumstance, take the time to draw the big picture for yourself and your partner.

Bringing a new baby or child into your family will be a joyful, yet challenging, change to your everyday life. Being financially prepared for extra twists and turns is an important part of making the transition as smooth as possible. That way you can focus on what really matters—bonding with your new family.

Interested in LGBTQ Financial Planning? Learn more here.