Company Uses Money Management To Evaluate Long Term Care
When seniors look toward moving to a retirement community, the information can be overwhelming. One of the most significant problems, though, may be sorting through the promotional material to arrive at a decision whether it is right for you.
One of my friends, George Lock, whom I met through a networking organization that connects professionals who work with seniors, has developed a unique and intriguing response for seniors looking to determine whether they can move to a community. George helps them to decide on the numbers. This ability is so interesting that a few weeks ago I had George appear as my guest on my weekly radio show on WCHE 1520, “Fifty Plus, Planning Ahead,” that is broadcast every Wednesday between 4:30 and 5:00 pm, and to explain further the process he uses.
Here is some background. George, one of the principals of a business, Principled Money Management, LLC, has worked with clients for some years following his own retirement, as a Daily Money Manager. Daily Money
Managers fill a significant gap especially but not exclusively for seniors. For those who need help organizing and paying bills, filing insurance claims, budgeting, running cash flow analysis, tracking investments and general organizational assistance, DMM’s can relieve the stress and free up the individual for more pleasurable activities.
In the course of George’s work as a Daily Money Manager, he came to realize that some of his clients were conflicted when it came to deciding whether to move to a retirement community or, even where they were determined to move, what plans would best satisfy their needs. Affordability was a concern and they could not gauge whether they could afford the move long term based on their income and investments. This is where George put pencil to paper or fingers to keyboard as the case may be and began to develop responses. The result is his ability to compare CCRC contracts to each other and also to other plans in the same community to come up with a basis for the client’s decision.
To anyone who has reviewed a Continuing Care Retirement Community (CCRC) agreement, the project is daunting. From a legal standpoint, I review them all the time to determine rights and liabilities. However, from a budgeting and financial perspective, families need to work the numbers.
The admissions or marketing office of the community itself does run projections but, until dealing with George and Principled Money Management, I had not been aware of anyone running these calculations for the applicant individual or couple.
Here is an example. Community #1 might have plan “A,” “B,” and “C.” Under Plan “A,” the applicant pays less for admission but, if he later moves to skilled care in the same community, he may have to pay the going rate. Under Plan “B,” his rate in skilled in the community would remain the same as his rate in independent living but his initial contribution would be higher. Under Plan “C,” the admission cost might be high but his estate would be entitled to receive a percentage of that cost on his passing and his cost in skilled care would also be reduced from Plan “A.”
These are just some possibilities. Other plans allow for a sliding scale of return of the deposit based on how long the person remains in the community.
Applicants for a CCRC might confront additional legal documents including Shareholders’ Agreements, a Life Estate Deed, Association agreements and policies, and details concerning regular management. These are the things I handle. George looks at the numbers.
Certain assumptions need to be made and George’s clients can provide the details. Likely performance on investments, guaranteed monthly income and other expenses also become relevant in developing the projections.
I asked George whether this process would work with applicants for communities in other states. George logically explained that, when working only with the numbers, the comparison can easily be made to decide whether to move to a community in North Carolina or Florida or anywhere else for that matter.
For those who want to find out more, Principled Money Management, LLC can be contacted at www.principledmoney.com.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.