We understand that most families don’t have the funds readily available for adoption expenses. Fortunately, there are many options available to help close a financial gap or even to completely fund an adoption.
Many Banks, Credit Unions and Foundations offer loans specifically for adoption costs. Each one of these credit unions and foundations will have their own eligibility requirements and interest rates.
The Lifesong Legacy Fund offers Interest Free Loans to help families with the cost of adoption. Families enter into an agreement to repay the loan through manageable monthly or annual payments.
Home Equity Loans usually provide low competitive rates and the interest is typically tax deductible. The other benefits to this type of loan are that you are able to use funds as needed and only pay interest on what is used.
Money borrowed from whole-life insurance policies is called a life insurance loan. (Note that you cannot borrow from a term life insurance policy.) While it is called a “loan,” it doesn’t really amount to a form of debt. You have accumulated these funds in the life insurance product, so they’re technically yours any time you choose to cancel the policy.
Many 401-k plans now offer loans, with very low interest rates, from your retirement savings. Many adoptive families are able to fund their entire adoption from this one loan.
Organizations provide grants to adoptive families based on an application process. The adoption grants are specifically for adoption cost, but unlike adoptions loans, do not need to be paid back.
Applicants are evaluated based on their income, assets, liabilities, earning potential, and other financial resource opportunities. Preference is given to applicants who are experiencing extraordinary financial hardship.
Tax benefits for adoption include both a tax credit for qualified adoption expenses paid to adopt an eligible child and an exclusion from income for employer-provided adoption assistance. For more information to go Topic No. 607 Adoption Credit and Adoption Assistance Programs | Internal Revenue Service (irs.gov)
Many employers offer adoption benefits that are similar to benefits offered to parents expecting biological children. These benefits may include information resources, paid or unpaid parental leave, adoption cost reimbursements, and even financial assistance.
Many times loved ones, family members, and co-workers want to help adoptive families reach their dreams but don’t know where to begin. A common practice among adoptive parents who want to grow their families through adoption is to do fundraising to help with adoption costs. Garage sales, bake sales, auctions, church events are just a few of the ways communities reach out to help adoptive families. Another option is through fundraising sites like GoFundMe.com.