Financing adoption

Don’t let your desire to bring a child into your home be derailed by the expenses. Here are some ways to help with the costs.

Now a family of six, the Kaplers make time to play and be active. This article (PDF) | Current issue (PDF) | Archive

By Amy Merrick, photo by Jeff Lendrum

Have you or someone you know made the decision to adopt a child? Getting to that point gave you a lot to think and pray about, including cost. Depending on the type of adoption, the process can mean a financial commitment in the tens of thousands of dollars. Luckily, there are many resources available – such as tax credits and loans – that can make adoption affordable.

Understand your options

Peter Kapler, a Thrivent Financial professional in West Bend, Wisconsin, and his wife, Kristen, adopted their two older daughters, half sisters ages 9 and 8, in July 2016. They also have two younger daughters, 6 and 4.

Before starting the adoption process, the Kaplers researched their options. Of the three most common types, “each one has pros and cons, and each one has very different costs,” Kapler says.

  • Adopting a child internationally.
  • Adopting an infant through a private agency in the U.S.
  • Adopting a child from the U.S. foster care system.

While some families adopt an infant from foster care, it’s not common. Similarly, it’s relatively uncommon to adopt an older child through a U.S. private agency.

Adopting a child internationally or adopting an infant in the U.S. generally costs from $25,000 to $30,000, but it can go as high as $55,000, says Kristina Berg, director of marketing and global family support for the adoption programs of Children’s Home Society and Lutheran Social Service of Minnesota.

“If it’s international, you’re paying immigration services and fees that go to the country where the child is from,” she says. “For infant adoption, it might include birth mother expenses or attorney fees.”

While it can seem like “a big scary number,” Berg says most adoptions take place over one to two years, with the fees spread out over that time.

Kapler and his wife took the least expensive route, adopting children from the U.S. foster care system. “It’s amazing to understand how many kids are in need in our own country,” he says. The cost for the adoption process itself was about $100 to file for updated Social Security and birth certificates.

Get help defraying costs

For more expensive adoptions, there are several options to help with costs:

  • Tax credits. Taxpayers can claim a tax credit for qualified adoption expenses, such as court costs and attorney fees. The credit is subject to a dollar limitation and phase-out for taxpayers whose income exceeds certain thresholds. Consult a tax professional for more information.
  • Loans. Some banks, credit unions and foundations offer loans for adoption. They can be interest-free or have low interest rates. A loan can be helpful for adoptive parents who have to pay expenses before they receive the tax credit.
  • Employer benefits. Companies may offer financial benefits such as a lump-sum payment for an adoption, payment of some adoption fees or reimbursement of expenses.
  • Grants. Nonprofit organizations sometimes offer adoptive parents assistance in the form of grants. Typically they don’t need to be repaid. Grants may target specific adoption situations, however, such as older children or those with special needs.
  • Crowdfunding. Raising money online from family and friends has become a popular way to help cover adoption costs.

Look at the big picture

Before adopting, it’s important to evaluate your overall financial plan, Kapler says. Make sure your household debt is under control, and establish or add to an emergency fund. Consider whether a parent will need to stay home or cut back on work hours to help a child adjust. Update your budget to include added expenses you might incur, such as clothes, books and child care. And leave room for some sudden expenses. When Kapler’s family received the call that foster children were ready to live with them, they had to purchase a bunk bed set that night. You also may need to re-evaluate life insurance and disability income insurance to make sure you have enough coverage for your larger family.

Adoption brings great rewards. “The benefits have certainly been the love and joy that children bring to the relationship,” Kapler says. “It’s been an incredible spiritual journey as well.”

Amy Merrick teaches journalism at DePaul University in Chicago. Her work has appeared in The Wall Street Journal, The New Yorker online and the Chicago Sun-Times.