by Ira Brower~
Sometime during your later retirement years you may find that your financial and lifestyle needs or those of a loved one are becoming too cumbersome to manage. In our experience providing trust and estate planning services for the retired and soon-to-be retired individual, one of the toughest decisions for our clients is a lifestyle change.
By lifestyle change I am referring to facing the reality that you can no longer physically support maintaining the home where you raised your family and the associated expenses. Over the years we have helped clients transition from the home where they raised their family to a retirement community. Now we are helping these same people with another lifestyle change; moving from the retirement community to a life-care community which is also known as a continuing care retirement community.
With the growth of the life-care community concept we are finding that many of our clients are now transitioning from their home directly to the life-care community because of the various levels of service they provide as well as minimizing future moves. Basically you are aging in place!
Life-care communities allow residents to live independently for as long as they can, and then to move on to assisted living and then to a skilled nursing care facility if needed. All located in a “campus” environment at one location. Services provided are usually tailored to meet the needs of the resident. When a specific service is not required, the resident still can opt to enroll in it later.
When you buy into a life-care community you are obliging yourself in advance to a substantial financial commitment in exchange for the community’s promise to care for you in the future. The life-care community contract should be specific as to when a resident should move to another level of care. Up to that time the resident may, for example, bring in home health care services after a hospital stay or use other personal supportive services to help remain where he or she is currently.
The contract should not be one way. It should also allow for instance, that if a resident living independently suddenly becomes incapacitated to the point where he or she needs to enter a skilled nursing facility for a time, upon recovery the resident can return to his or her independent lifestyle within the community.
Many life-care communities operate as nonprofits and are affiliated with a specific ethnic, religious or fraternal order, and membership may be a requirement. Most life-care communities require applicants to have a medical examination in order to assess their physical and mental status. Some preexisting conditions may cause a community to refuse an applicant.
Here are three types of contracts: They may be called something else by different life-care communities and may only be available based upon certain state laws.
A life care/extensive contract delivers the whole package—housing, residential services, amenities and unlimited long-term nursing care at little or no additional cost for as long as the services are necessary. This type of agreement is the most expensive, but in the long run could prove well worth the cost.
A modified/continuing care contract is similar, but long-term health care or nursing services are limited to a certain number of days per year or lifetime. After the specified care period, the resident is responsible for any additional cost.
A fee-for-service contract requires that residents pay separately for all health and medical services and for long-term care (although access to care can be guaranteed). This is the least expensive, but most risky, contract. If more extensive care is needed later on, the cost can be very high.
Some communities have arrangements to rent housing on a monthly or annual basis. Access to health care services are extra but won’t be guaranteed. Other agreements may start at the assisted living or skilled nursing facility level from somewhere other than the life-care community.
If you find the concept of a life-care community attractive, before signing a binding contract, it’s highly recommended that you seek financial and legal advice before making that final decision.