What To Look For In a CCRC
When exploring senior housing arrangements, one attractive alternative for many today is a CCRC or Continuing Care Retirement Community. CCRC’s are communities that provide within them varying levels of care. A new resident must typically be admitted when she can live independently. If health worsens later, then the resident can move to assisted living or to skilled nursing care without leaving the community. Before signing on, new residents need to know what to look for both in the community and in the agreements they sign.
First, come the obvious. Location, convenience, and accessibility play a leading role. Some prospective applicants closely examine living quarters, meals, proximity to relatives, transportation and amenities and also take into account who among their friends have moved here so that they can socialize.
Perhaps less obvious are legal issues. Here are some considerations to keep in mind.
Solvency. Since living arrangements are long range, it is important to investigate the financial solvency of the community and its owners. The documents provided will typically include not only the company or partnership that bears overall responsibility but also related corporations and joint ventures. Description of escrow arrangements may also prove useful in determining how funds are being kept and whether there are adequate reserves for the future.
What will be the source for the initial payment and for monthly payments thereafter. This is a question the prospective resident should ask himself. Typically, communities expect a relatively sizeable payment upfront. Many new residents satisfy this requirement from the proceeds of the sale of their residence. Monthly payments, whether from pension, dividends, or investments, should be earmarked and the resident should get a sense of whether the arrangement is affordable for her.
What kind of ownership rights and responsibilities are connected with being a member of the community? Some communities sell a life estate in a specific unit and residents may also belong to a community association or condominium association. In some communities, residents are basically tenants.
What plan is the resident agreeing to and what are the provisions of the plan? Different plans are usually available depending on whether the new resident is concerned that some of the initial investment be returned and how much. Plans also take into account whether the resident wants to leave a portion of her investment to her heirs when she dies.
What options are available to continue at a given level of care? Sometimes, even though a resident who needs more assistance could move to assisted living from her original unit, she wants to stay in independent living and bring a caregiver into her unit to help. One question is whether the community would allow this.
What happens if a resident (a) changes her mind (b) moves or (c) dies. Usually agreements state that full or partial refunds may be paid depending on whether the prospective resident changes her mind before moving into the community or at some time thereafter. Some agreements refund initial payments on a sliding scale depending on how long the resident has lived there. Some have a specific cut-off date without reference to a sliding scale and funds are refunded before but not after that date. If funds are being returned on a move, often this occurs after the unit has been resold to a new incoming resident. The Steven Feakes & Associates site is where one can go to get legal help.
What restrictions, if any, are there on disposition of assets? The Agreement should be reviewed on this subject. The federal Deficit Reduction Act effective February 8, 2006, also addressed this issue.
Does the resident pay more if she moves to a higher level of care or does cost stay the same? Some agreements allow residents to move to assisted living and even skilled care while paying the same monthly rate. The agreement needs to be consulted on this issue.
What are the financial arrangements when the resident has exhausted his or her assets. The arrangement should be that he or she is permitted to stay, assuming that the resident has used the assets initially disclosed on the application toward her support and care and not given her assets away.
There are specific questions that the trained eye looks for that may not generally be apparent to the person first viewing the Purchase, Repurchase and Continuing Care Agreements. All of these legal issues should be understood, discussed, and resolved in advance so that residents and their families know the terms of their agreements.
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.