by Jeffrey J. Downey, Esq
After paying $840,000 to live in an assisted living facility, a couple is faced with losing all their money.
The couple, Bob and Sandy Curtis, invested a huge chunk of their retirement proceeds in a continuing care community. They expected to spend the rest of their life in the facility, only to find out that it’s going out of business.
Continuing care retirement communities (CCRC) are increasingly common in the United States. The idea behind CCRCs is that they offer different levels of care as the resident’s needs change. They may include independent living units, assisted living facilities and skilled nursing homes all in one place. Many such facilities require a huge initial payment with the understanding that should the couple run out of money, they will only be required to fork over their social security and/or pension benefits. These can be attractive contracts for elderly people, explains elder abuse attorney Jeffrey J. Downey. But if the facility goes bankrupt, or if the care is substandard, the retirees could be faced with a real challenge. According to Bloomberg, since 2020, it’s estimated that some 16 CCRCs have gone bankrupt.
Elders seeking to enter into one of these contracts should conduct extensive research before assuming that a company is going to be in business for the rest of their lives. That research should include obtaining information regarding the company’s financial status and debt obligations. They should also consider proposing a contract that requires the amounts to be paid in 3 or 4 installments over time, with the option of not continuing the payments should the facility become insolvent or should the quality of care become a problem. Finally, many assisted living facilities are set up with complex corporate structures, so that if the underlying operating entity goes bust, money can be pushed up the corporate chain. Long-term care facilities often play the shell game of hiding their real assets in a holding or leasing company. If the CCRC company you are thinking of joining has such a corporate structure, insist that the parent companies be named in the contract as a guarantor, should the primary CCRC become insolvent.
If you or a loved one has been subject to neglect or financial exploitation at the hands of a nursing home or assisted living facility, call the Law Office of Jeffrey J. Downey for a free consultation today.
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