In the last year I’ve helped fill out a number of retirement community applications and some of the requests take families/seniors by surprise. Today we discuss what to expect:

Assisted Living

An assisted living community is a bit less involved compared to a continuing care retirement community (CCRC). My guess is because the entrance fee and time horizon is less.

  • Consent to review medical records and for a health evaluation by a community nurse.
  • Resident profile to understand your religious needs, background, and general preferences.
  • Application
    • Financially, they want to know the account types, balances, property, and income sources. If a third party is offering to cover some or all of the bill, include this information as well. They will ask for the third party to attach themselves to the lease as well.
    • Health, they want to know preferences for care intervention, such as hospitalization, intubation, medication, etc. Providing documents like MOLST, DNR, Living Wills, etc are recommended.
    • Estate Planning Documents, health care proxies (HCP) and durable power of attorneys (DPOA) will be required. But keep in mind they need to be UPDATED. All too often they’re old and the person coordinating the effort of moving mom and dad isn’t the person listed on the forms. For example, it’s a spouse who isn’t capable of signing. If there is a contingent, a declination of DPOA may need to be created and signed to show the contingent agent is authorized to step in. If no contingent is named, a new DPOA should be drafted to give authority to someone other than the spouse.
  • Lease Agreement
    • These are pretty boilerplate. It’s important to understand the finer points on expected annual fee increases (a good 3.5%/yr), health issues that would trigger a fee increase, and what’s included in the price.
    • Note that many agreements in general now require arbitration in the event of a conflict. Arbitration refers to an alternative dispute resolution method where the parties in dispute agree to have their case heard by a qualified arbitrator out of court.
  • A check for first and last month’s rent

FYI: Assume the last month’s rent is never refunded or truly utilized as there is a requirement for 30-days notice and leaving a community is often not planned (urgent need to move to skilled care or another community with more resources, or death). So usually the last month’s rent goes toward covering the 30-day notice requirement even if the resident is not there.

  • Entrance Fee
    • Expect $5k-10k. This is sometimes negotiable if there are promotions to fill rooms. It never hurts to ask. Deals may also be had toward the first month’s rent, move-in costs, room furnishings, or room upgrades. You may find that they’re willing to refund the entrace fee within a short time period (2 weeks – 2 months) if the transition goes sideways and it’s agreed the move wasn’t a good fit.

So let’s say the rent is $8k with a $7k entrance fee, that means outlaying $23k at the lease signing. This may require requesting trades and transfer from investments if you’re not flush with cash. Give this a week’s lead time to coordinate with your investment manager.

  • Miscellaneous:
    • A list of suggested belongings (sheets, toiletries, etc).
    • Copies of a photo ID, Medicare Card, Supplemental Insurance card, SS# (yes – they may run a credit check, so let them know if you’ve put credit freezes in place).
    • The contacts of your attorney, financial advisor, and CPA.
    • Bill-pay sign up to automate billing, not always required but many times encouraged.
    • A new patient form to preferred pharmacy.
    • A W-9 tax form.
    • Authorization to take and share photos for marketing. 
    • Info to sign up for cable/internet if wanting more than basic service.

Continuing Care Retirement Communities

All of the above, and more! CCRCs have a materially higher entrance fee. Expect anywhere from $30k – $1M. So they want to ensure that covering the upfront cost isn’t prohibitive to covering the ongoing rent. Those moving into CCRCs are also generally younger (ideally 70s vs 80s-90s). So the ongoing cost of rent can be a much longer timeline than an assisted living.

  • The financial application will include a request for the last 2 years of tax returns, account statements, and income source statements. They are trying to see if you satisfy their requirements, which may be something along the lines of having assets 2x the entrance fee and income 2x the cost of rent. And unlike an assisted living that takes your word for it on the application, they want to see the evidence.
  • Lease agreement. Again, these are pretty boilerplate but it’s important to understand the finer points that may be unique to the community.
    • What happens when you make updates to an apartment?

FYI: be aware that when moving in it’s usually no cost to have something like the carpet replaced and the unit painted, and it’s pretty reasonable to have flooring switched to their selection of hardwood. It’s negotiable on what else they may cover depending on the condition (showers, cabinetry, countertops, lighting, etc). In my experience though, going with their replacement options is more affordable than trying to coordinate something from the outside world. When you move out there is no need to revert the apartment back to how it was originally because it’s already meeting community standards (and likely just due for an update anyway). But when choosing your own materials from a third-party, you’ll not only pay market rate for the install, but will likely be on the hook to have it replaced back to community standards if the next resident wants something different.

    • Be sure to understand the terms of how healthcare is provided and afforded as issues arise.
      • Will it be brought to you?
      • Will you be required to move to an on campus assisted living or nursing home?
      • What becomes of your entrance fee for the original apartment in that event?
      • Do you pay market-rate for care, does rent adjust upward, or is it included in your current rent?
      • What happens if there are no beds available in their assisted living or the nursing home?
      • Can your entrance fee be used toward rent costs should your income and portfolio can’t keep pace?
    • What are the terms and timeline to receive back your entrance fee and discontinue rent?
      • Sometimes you have to wait until the unit is re-sold to discontinue rent and be refunded any promised % of the entrance fee.
  •  Miscellaneous:
    • A biography for a community directory (and eventual obituary).
    • Renter’s insurance to cover your personal property.
    • Car Vin/Lic plate info for parking registration.
    • App sign-up to automate monthly billing and to help you keep track of monthly meals, etc.