THIRD PARTY & RELATIVE ADOPTIONS are those created through the voluntary participation of a birth mother and the prospective adoptive parent(s).  In a third-party private adoption, the birth mother freely chooses to surrender her legal rights to her child and have him placed for adoption, usually because she has reached the decision that her age and/or life circumstances make it impossible for her to adequately parent the child.

In a domestic (US-born child) third-party adoption, the birth mother usually works with a private adoption agency that helps her obtain medical care during the pregnancy and delivery.  The agency also contracts with prospective adoptive parents, and helps match them with newborns or infants.  Each agency has different policies about who may adopt, with some agencies placing limitations on parents based on age, marital status, or sexual orientation.  Non-traditional families - single parents, gay/lesbian parents, or older parents - should research this issue extensively before choosing an agency.

In some third-party adoptions, the prospective adoptive parents locate a birth mother without the use of an agency.  In that case, the adopting parents hire an attorney to complete an independent (non-agency) adoption.

In a relative adoption, no adoption agency is necessary.  The birth mother may surrender the child directly to the relative (aunt, uncle, grandparent, etc.), and the attorney will finalize the adoption in court.

Currently, the federal government allows a one-time adoption tax credit on most adoptions.  Prospective parents should discuss this tax credit with their accountants.