California Surrogacy Laws: Agreements, Parentage, and Costs

California surrogacy laws, set out in Family Code Sections 7960 through 7962, permit compensated gestational surrogacy and let intended parents be recognized as a child’s legal parents before birth, as long as a written agreement is signed and notarized before any medical procedures begin and each side has its own independent attorney.¹ The framework is one of the most protective in the country, which is why intended parents from other states and other countries frequently pursue surrogacy here.

Who Can Be an Intended Parent or Carrier

The statute defines an intended parent as any individual, married or unmarried, who demonstrates the intent to be legally recognized as the parent of a child born through assisted reproduction.² Single parents, same-sex couples, and unmarried partners all qualify. What matters legally is intent, not marital status or sexual orientation.

The gestational carrier must be someone other than an intended parent and must agree to carry a genetically unrelated embryo.² Both parties need the capacity to enter a binding contract, generally meaning they are at least 18.

There is no residency or citizenship requirement. A parentage action can be filed in the county where the child is expected to be born, where either party lives, where the agreement was signed, or where the medical procedures take place.¹ So long as some part of the arrangement connects to California, the courts have jurisdiction.

What the Written Agreement Must Contain

Every gestational carrier arrangement requires a written contract that both sides sign before any medical steps begin. No embryo transfer and no injectable fertility medications may occur until the agreement is fully signed and notarized.¹ Getting ahead of the paperwork can undermine the legal protections the statute provides.

At a minimum, the agreement must include the date it was signed, the identities of the intended parents, whether any donated eggs, sperm, or embryos were used (the donor need not be named), and a plan for how the intended parents will cover the carrier’s medical costs and the newborn’s expenses, including a review of any health insurance policy that might be used.¹ Signatures must be notarized or verified through an equivalent affirmation.

Before signing, the gestational carrier and the intended parents must each be represented by their own separate, independent licensed attorney.¹ Sharing counsel is not allowed. Each attorney provides a signed declaration confirming independent representation, and those declarations are filed with the court along with the agreement. It is standard practice for intended parents to cover the carrier’s attorney fees, though the statute does not require it.

Insurance and Medical Expenses

Section 7962 requires the agreement to disclose in detail how medical expenses will be covered for the gestational carrier and the newborn. If health insurance will be used, the parties must review the policy’s provisions on surrogate pregnancy coverage, potential liability the carrier might face, third-party liability liens, and any notice requirements that could affect payment of claims.¹

Many health insurance policies exclude surrogacy-related pregnancies. A carrier who assumes her existing coverage will pay for everything can end up with large bills. The statute lets the parties satisfy the disclosure requirement simply by stating that coverage is uncertain, but that legal formality is not the same as actual protection.¹ Where a carrier’s policy excludes surrogacy, intended parents commonly purchase a separate surrogacy-specific policy or set aside funds to cover medical costs. Insurance companies may also assert liens on carrier compensation if they later determine that surrogacy-related claims should not have been covered.

Pre-Birth Parentage Orders

Once the agreement is signed and pregnancy is confirmed, the intended parents can file a court action to establish themselves as the child’s legal parents before the baby is born.¹ The resulting order is commonly called a pre-birth order.

Attorneys who handle these cases typically begin preparing paperwork around the 11th week of pregnancy, and in most cases the order is entered without a hearing as an uncontested judgment. Filing requires submitting the signed, notarized agreement along with each attorney’s declaration to the Superior Court.

Once granted, the order names the intended parents as the child’s sole legal parents and confirms that the gestational carrier and her spouse or partner have no parental rights or obligations. A properly executed agreement lodged with the court overrides legal presumptions that might otherwise treat the birth mother or her spouse as a parent.³ The order directs the hospital and the state’s vital records office to list the intended parents on the original birth certificate. The carrier’s name never appears. That is the core advantage over states requiring adoption or a post-birth parentage process.

Compensation and Escrow Rules

California explicitly permits compensated surrogacy. Carriers receive base compensation for carrying the pregnancy, separate from reimbursement for medical bills, maternity clothing, lost wages, and other pregnancy-related costs. Base compensation for first-time gestational carriers generally ranges from $40,000 to $75,000, varying by experience, location, and negotiation.

When a nonattorney surrogacy facilitator is involved, all client funds must be held either in an independent, bonded escrow account managed by a licensed escrow company or in a trust account maintained by an attorney. The facilitator cannot have any financial interest in the escrow company holding the funds, and none of the facilitator’s directors or employees can serve as agents of that escrow company.⁴

Funds may be released only by the attorney or escrow agent according to the terms of the surrogacy agreement and the separate fund management agreement between the intended parents and the facilitator. Payments made directly to a doctor for medical services or a psychologist for psychological services are the one exception and can bypass the escrow arrangement.⁴ This structure exists to prevent intended parents from failing to fund promised payments and to prevent facilitators from mishandling money owed to carriers.

What Surrogacy Costs Overall

Beyond the carrier’s base compensation, expect substantial additional costs. Agency fees for matching and case management typically run between $20,000 and $60,000. Legal representation for both sides plus escrow management adds roughly $5,000 to $25,000. Medical expenses covering IVF, prenatal care, delivery, and any complications add tens of thousands more depending on insurance coverage. Gestational surrogacy in California frequently totals between $100,000 and $200,000, sometimes more.

None of these figures are set by statute. They reflect market rates and depend heavily on the agency, the attorneys, the carrier’s package, and how much of the medical care insurance actually covers.

Traditional Versus Gestational Surrogacy

California law defines two distinct types of surrogacy. A gestational carrier uses an embryo created from other people’s genetic material and has no biological connection to the child. A traditional surrogate uses her own egg with sperm from the intended father or a donor, making her the genetic mother.²

Section 7962’s detailed contract and parentage provisions apply specifically to gestational carrier agreements. Traditional surrogacy is not prohibited, but the parentage process is less straightforward because the surrogate has a genetic link to the child. Courts have discretion over whether and when to grant a parentage order in traditional surrogacy cases, and the legal outcome is less predictable. The rules described above apply to gestational arrangements.

Federal Tax Treatment

State law is favorable; federal tax law is not. The IRS position is that you cannot deduct as medical expenses the amounts you pay for a gestational surrogate’s identification, compensation, or medical care, because those payments go to someone who is not you, your spouse, or your dependent.⁵ This holds even when the surrogacy is medically necessary.

The distinction is between fertility treatments performed on the intended parent’s own body, which can qualify as deductible medical expenses, and costs related to the surrogate’s pregnancy, which do not. IVF costs for egg retrieval from an intended mother are potentially deductible; the embryo transfer into the carrier and her prenatal care are not. For any qualifying fertility expenses, only the portion exceeding 7.5 percent of adjusted gross income is deductible, and only if you itemize.⁶

On the carrier’s side, base compensation is taxable income. Escrow agencies typically do not issue a 1099-MISC for surrogate payments, but the absence of a 1099 does not eliminate the obligation to report the income. A tax professional familiar with surrogacy can help both sides report correctly and identify any legitimate deductions.

1
California Legislative Information. California Code FAM 7962 – Assisted Reproduction Agreement for Gestational Carriers
2
California Legislative Information. California Code FAM 7960 – Definitions Regarding Assisted Reproduction
3
California Legislative Information. California Code FAM 7962 – Assisted Reproduction Agreement for Gestational Carriers
4
California Legislative Information. California Code FAM 7961 – Surrogacy and Donor Facilitators
5
IRS. Publication 502 – Medical and Dental Expenses
6
Office of the Law Revision Counsel. 26 USC 213 – Medical, Dental, Etc., Expenses