In my blog post last week I was explaining about CCRCs. Continuing care retirement communities provide a continuum of care. The idea is that you make one decision to move to a CCRC and as your health declines and you need more care, you move from independent living to assisted living to nursing care, all provided within the same community.
While it can be a great option for some, as with anything, it isn’t the right fit for everyone and has some drawbacks to be aware of. Mary’s call to our office revealed one of them. Mary’s dad moved into the independent living part of the CCRC. That’s where most people start out and, in fact, is the only part that most people focus on when they are making a decision whether to move there or not. Her dad enjoyed living there.
When it came time for Mary’s dad to move to the next level of assisted living care, however, Mary had some issues with the care. A family decision was made to leave the CCRC and seek care at another “stand alone” facility. Her dad had paid a $600,000 entrance fee upon move in. Under the contract he signed, he would be paid back 90% of the interest fee when he moved out.
So why was Mary calling? Because Dad had left the facility 2 years ago and they still had not received back the entrance fee. They were being told that the CCRC would be able to return the entrance fee as new residents moved in and paid their entrance fee. Mary’s dad was on a waiting list. When he reaches the top of that list he will be repaid with funds provided by the next new resident. The problem was that Mary told me her dad had moved up the waiting list only 2 spots in the last 2 years.
While I didn’t see this particular CCRC admissions agreement, most don’t provide a time limit by which funds must be refunded. However, this situation seemed off. Barely moving up on the waiting list doesn’t sound good. Is that because nobody is moving in to the CCRC because no one is moving out or are there vacancies that aren’t being filled?
I didn’t have those answers. I told Mary that her dad signed the CCRC contract so would be bound by those terms. She could sit down with a litigation attorney who could tell her whether there was a way to press the facility to give her more concrete answers or to pursue a claim of breach of contract.
Thankfully, Mary said her dad had other assets from which to pay for care at the facility that he moved to. We do, however, see many people considering CCRCs who would have to commit most or all of their savings to the entrance fee. Mary’s call should be a cautionary tale. If things don’t work out, it could be a while before you get that money returned to you.