California Surrogacy Laws: Agreements, Parentage, and Costs

California surrogacy laws, set out in Family Code Sections 7960 through 7962, allow compensated gestational surrogacy and let intended parents be recognized as a child’s legal parents before birth through a court order. The statute requires a written, notarized agreement signed before any medical procedures begin, independent attorneys on each side, and disclosure of how medical expenses will be paid. These protections are a large part of why California is one of the most used jurisdictions in the country for surrogacy, including by families who live elsewhere.

Who Can Enter a Surrogacy Arrangement

The statute defines an intended parent as any individual, married or unmarried, who intends to be legally recognized as the parent of a child born through assisted reproduction.¹ That covers single parents, same-sex couples, and unmarried partners on equal footing. Marital status and sexual orientation do not change the analysis; intent to parent does.

The gestational carrier must be someone other than an intended parent and must agree to carry a genetically unrelated embryo.¹ Both parties need the capacity to contract, generally meaning at least 18 years old.

You do not have to live in California or be a U.S. citizen to use California’s law. 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.² If any part of the arrangement connects to California, the state’s courts can take the case.

What the Agreement Must Contain

Every gestational carrier arrangement needs a written contract that both sides sign before any medical procedures begin. The statute draws a hard line: no embryo transfer and no injectable fertility medications until the agreement is fully executed and notarized.² Starting medical steps before the paperwork is done can undermine the parentage process that depends on it.

At a minimum, the agreement must include:

The date it was signed.
The source of the genetic material. If donor eggs, sperm, or embryos were used, the agreement does not need to name the donor but must specify the type of donation.
The identity of the intended parents.
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 may be used.²

Signatures must be notarized or verified through an equivalent affirmation.² The signed agreement is filed with the court when the parentage order is sought, so defects in execution can create problems later.

Separate Attorneys for Each Side

Before anyone signs, the gestational carrier and the intended parents must each be represented by their own separate, independent licensed attorney.² Sharing a lawyer is not permitted. Each attorney files a signed declaration confirming independent counsel; those declarations go to the court along with the agreement.

It is standard practice for the intended parents to pay the carrier’s attorney fees, but the statute itself does not impose that as a legal requirement. Most agreements build it into the contract terms.

Insurance and Medical Expense Disclosure

Section 7962 requires the agreement to disclose how medical expenses will be covered for both the carrier and the newborn.² If health insurance will be used, the parties must review the policy’s specific provisions on surrogate pregnancy coverage, potential liability for the carrier, third-party liability liens, and any notice requirements that could affect whether claims are paid.

This is where surrogacy arrangements most often run into trouble. Many health plans exclude surrogacy-related pregnancies, and a carrier who assumes her existing policy will cover everything can end up with large unpaid bills. The statute does allow the agreement to simply state that coverage is uncertain if that is the case,² but satisfying the disclosure rule and actually being protected are different things. When a carrier’s policy excludes surrogacy, intended parents commonly buy a separate surrogacy-specific policy or budget to pay medical costs directly.

Establishing Parentage Before Birth

Once the agreement is signed and pregnancy is confirmed, the intended parents can file a court action to be established as the child’s legal parents, and California allows this before the baby is born.² The resulting judgment is commonly called a pre-birth order. Attorneys typically start the paperwork around the 11th week of pregnancy, and in most cases the order is entered without a hearing.

Filing requires lodging the signed, notarized agreement and the attorneys’ independent-counsel declarations with the Superior Court. The order establishes the intended parents as the child’s sole legal parents and confirms that the gestational carrier and any spouse or partner of hers have no parental rights or obligations. A properly executed agreement that is filed with the court overrides any legal presumptions that would 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 child’s original birth certificate. The carrier’s name never appears. No post-birth adoption or re-parentage proceeding is needed, which is a significant advantage over states that require those extra steps.

Compensation and Escrow Rules

California explicitly permits compensated surrogacy. A gestational carrier typically receives base compensation for carrying the pregnancy, separate from reimbursement for medical bills, maternity clothing, lost wages, and other pregnancy-related costs. First-time carriers generally receive base compensation in the range of $40,000 to $75,000, though the figure varies with experience, location, and individual negotiation. The statute does not set these amounts.

When a nonattorney surrogacy facilitator is involved, the law requires client funds to be held in either an independent, bonded escrow account at a licensed escrow company or an attorney’s trust account. The facilitator cannot have a financial interest in the escrow company holding the funds, and none of the facilitator’s directors or employees can act as agents of that company.⁴

Funds can be released only by the attorney or escrow agent as set out in the surrogacy agreement and in a separate fund-management agreement. 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 The structure exists to prevent both missed payments to carriers and mishandling of funds by middle parties.

What Surrogacy Costs Overall

Beyond the carrier’s base pay, agency fees for matching and case management typically run $20,000 to $60,000. Legal representation for both sides plus escrow management adds roughly $5,000 to $25,000. Medical costs, including IVF, prenatal care, delivery, and any complications, can add tens of thousands more depending on insurance coverage. A gestational surrogacy in California frequently costs between $100,000 and $200,000 or more. None of these figures are set by statute; they reflect market rates and vary with the agency, the attorneys, the compensation package, and the mix of covered versus out-of-pocket medical care.

Federal Tax Treatment

The tax picture catches many intended parents by surprise. The IRS has taken the position that amounts paid for a gestational surrogate’s identification, compensation, or medical care are not deductible as medical expenses, because those payments are for someone who is not you, your spouse, or your dependent.⁵ This holds even when the surrogacy is medically necessary.

The IRS does distinguish between fertility procedures 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 subsequent prenatal care are not. For any fertility expenses that do qualify, you can deduct only the portion that exceeds 7.5 percent of your adjusted gross income, and only if you itemize.⁶

A Note on Traditional Surrogacy

California law recognizes two forms of surrogacy. A gestational carrier has no biological connection to the child, while a traditional surrogate uses her own egg, making her the genetic mother.¹ The detailed contract and pre-birth parentage protections in Section 7962 apply to gestational carrier arrangements. Traditional surrogacy is not prohibited, but the parentage process is less predictable because the surrogate has a genetic link to the child, and courts have discretion over whether and when to grant a parentage order. If you are considering traditional surrogacy, assume the clean, pre-birth path described above may not be available to you and plan the legal strategy accordingly.

1
California Legislative Information. California Code FAM 7960 – Definitions Regarding Assisted Reproduction
2
California Legislative Information. California Code FAM 7962 – Assisted Reproduction Agreement for Gestational Carriers
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