This doesn't sound just right to me!

scarlett2001December 26, 2007

I would appreciate your advice and input because I don't know how to proceed in this matter:

My parents are 92 AND 86, still iving independently in their own home, but we three grown children can see that very soon they will be unable to continue this. Two of us live across the country and my brother lives a little over 2 hours from them. All of us have offered to have them move in with us, but they don't want to.

Brother and his wife found a retirement community close to their house that looks just fabulous -the people there can have their own apartment, eat meals there, they have eveything anybody could want. It cost $2K a month, which our parents can easily afford.

Now here is the part that I don't like: they have to invest a "deposit" of $260K to this community. The community invests it, but my parents get no return. All the interest goes to the company that runs these communities. They operate all over the USA, same people running it. They are calling themselves a non-profit organization, but I don't see how that could be.

They want extensive financial info from my parents, including having a person come out to appraise their house. I know this is not unusual, but my mother inherited a nice sum of money awhile back and she has it in trust funds, annuities etc, and they want papers from all her financial instutitions documenting this.

I told her not to sign the contract until we can get a lawyer to look over this, but now brother and his wife are really putting on the pressure. They want my folks to take a three day "vacation" at the place. I figure they will be a captive audience there and get the really hard sell and probably cave in. The biggest selling point to my mom is that she can have her dog live with her. She does not understand the financial aspects here.

Am I being dumb or does this sound very fishy to you?

I have done an internet search and have not found any really bad stuff about this place, but I wonder if it is so great and there is such a wait list, why did they get approved as soon as the financial info came up? Any thougts you have about this would be really appreciated!

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I believe what that place is, is called a Continuous Care Retirement Community. (CCRC)

They are typically very nice and the rationale behind the initial large investment is they promise to take care of the residents from living entirely independently clear through the potential need for assisted living, and even through the need for total nursing home care.

There are many such places, but you should check licensing within the state or some sort of certification by the state.

Most have the assisted living and nursing home resident apartments right there, and the staff to care for your aging parents are employed by the CCRC. So it eliminates any further decision making, and any further moves.

Of course, if one NEVER needs further care, and simply passes away in their sleep one night, one has footed a bill for services one never ends up needing.

I have my mother in a different type of is a Senior Community. There, she pays $2700 per month (Florida) for the independent living one bedroom apartment. She has 2 cats, and residents are permitted small dogs on the first floor only. It comes with 2 meals a day, weekly housekeeping, and laundring of sheets and towels, Mom has to do her personal laundry but the machines are free and just down the hall. She gets all sorts of activities, parties, gym, crafts, cards, dances, library, chapel, swimming pool and aqua aerobics.

The apartments are fully equipped kitchens, she could cook a turkey dinner there (but most residents go for the 2 provided meals a day in the lovely dining room with the excellent chef). Most residents just keep their coffee, cereal or sandwich stuff or favorite snack in their apartments.

She has a screened in balcony with lots of plants, which was like her set-up at her old condo, so she and the cats like that it was very familiar. She is required to ring a special bell each morning by 10 am that lets the front desk know that she is awake, otherwise they call you and make sure you are awake. If no response they come check on you and will call the ambulance if problem.

Each resident, on the inside of their door, hangs a glasene portfolio that lists the medications taken, allergies, and (if desired) a Do Not Resuscitate (DNR) so if something happens and the ambulance is called, they will know what to do, and have the health history. It is odd knowing it is hanging there on the door, but everyone has it there and it is a smart idea, so we don't give it a second thought anyore.

Hers has an assisted living wing, where she would move to if she ever needs more care (more money of course). But if she ever needs a true nursing home, I will have to relocate her down the street or to any other nursing home I desire. At this place, there is no $260K up front, and she pays her rent month to month, and can move out at any time, no contract. The only people who I have ever heard move out are those who run out of money.

Some of the seniors become roommates, because they charge less for a second person in an apartment. The roomies will total the rent and divide by 2. Mom has a one bedroom apartment, but they actually have many 2 bedrooms, and a few 3 bedrooms. One has to be 62 to move there. It is nice because they cover EVERYTHING but personal laundry, haircuts, and telephone bill. All heat, A/C, cable, entertainment, and their own bus for residents to take to doctors, stores, outings, all included.

We have a CCRC in town, and while it is nice, I just didn't see a reason for her to drop a chunk of change into it. Worse comes to worse, she'll go into a nursing home. Hopefully that will never happen, but I will have to deal with it if it does.

There may be options like that in your area. I know the corporation that runs my Mom's place has many locations in several states. Shop around. Your parents should visit several, and DO take a meal or two on different days and spend the night or two where possible. Ask residents opinions too. I think where mom is is ideal for her for now, and I pray she will never need to go to a nursing home, although I do forsee a time where I might have to move her to the assisted living wing, but that would be several years from now, I hope.

    Bookmark   December 26, 2007 at 11:24AM
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From the information that you have given, I don't like the sound of this agency. Rather, I have some questions about some of the information that you have provided.

If they want the $260K deposited with them, and they get the income that it produces (in addition to monthly rent/fee/whatever) ...

... is there a guarantee that you get the full amount back at the end of the game?

... who gets it (the original contractees being dead)?

... do you have any say in what type of investment they use?

... is there insurance on the principal, so that they don't end up giving you an embarrassed smile, saying that they're sorry ... but they lost half of the money?

Also, if you provide the $260K for the depost ...

... what business is it of theirs what other assets that you have, or where they are, or what you're doing with them?

Do they have some intention of wheedling their way into becoming beneficiaries from your folks' will(s)? Or having them turn over more assets, for whatever reason (however spurious)?

What's this about requiring an appraisal of their home?

By their appraiser?

It seems to me that's none of their business, either - your folks' obligation is to turn over the $260K ... and pay their monthly rent. That's all. Isn't it?

Pardon me for being a suspicious old man.

ole joyful

    Bookmark   December 27, 2007 at 4:33PM
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Ole Joyful, thank Goodness you weighed in - I always read your posts and I think you are very wise.I was hoping you would read this and give me your input. The questions you have raised are exactly the ones I want to know, but the place has not answered my calls or emails. Okay, it's the holidays, maybe they are taking off.

... is there a guarantee that you get the full amount back at the end of the game? They say there is, unless my parents run out of money, in which case their upkeep comes out of the deposit. Of course the cost goes up every year, so who knows how much it could be in several years.

... who gets it (the original contractees being dead)? The heirs get whatever is left.

... do you have any say in what type of investment they use? I cannot get any answer, or even how it will be invested. FDIC does not cover that large a deposit so I have no idea.

... is there insurance on the principal, so that they don't end up giving you an embarrassed smile, saying that they're sorry ... but they lost half of the money? Again, no answer yet. My brother assures me that he has done "all the research" but he cannot answer tht question either.

... It is run by a man named Erickson,who has these CCRC's all over the USA. He is very wealthy and has autographed photos of both Bush presidents on his desk. Bush Jr has personally spoken at his CCRC touting Medicare reform ideas. I have to say, that alone really puts me off. Do you think I am correct in seeing this as basically an investment company that runs a nice CCRC on the side?

    Bookmark   December 28, 2007 at 2:08PM
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Check with your state and see if they are licensed to run the home in YOUR state. Ask about complaints, and why so much money etc. Many of these homes are not licensed in the state they operate. I don't think they are allowed in my state, but then we have some of the best assited living homes and nursing homes. It seems to me that the state/relatives should be allowed to see the records, where the money goes, what happens if they run out, can they keep their own Dr's what hospital will they go to etc. I personalilty would not want to deal with a corp like this. What about the interest on the money they invest? All records must be open to both the state and the relatives. As to your relatives--put your foot down and refuse to allow any money to leave the parents without all relative agreeing.

    Bookmark   December 28, 2007 at 9:32PM
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Another thought, if you feel that the money that should go to the kids, or grandkids are being taken away, maybe a lawyer should check the wills or put the money into a trust fund that this company cannot touch. Also check with the company legal people where your father/mother retired from. With all the money going to the corp. what about the monthly income--where does that go? Again it seems like a lot of money that the family is cheated out of, but then that is my opinion. Will your brother end up getting something and his sisters nothing.

    Bookmark   December 28, 2007 at 9:43PM
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Have them transfer all their assets to their children before they apply to move in. GET AN ATTORNEY first.

    Bookmark   December 29, 2007 at 10:36AM
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Keep in mind, the lookback period for disbursing assets before going into long term care with the express intention of having the county or state pick up the tab is now 5 years. Little late for the OP to think about that advice.

That being said, I've heard of those CCRC faculities - there was a large, some church affiliated one in the Maryland suburbs of DC. To get in, you turn over everything you own, including your house, and they take care of you until you die. The financial records, etc. are necessary for them to insure that your parents will always be in the category of "private pay" and their assets are enough to insure that the institution will never find themselves not being paid for their services. And also they want to know if the potential residents deliberately impoverished themselves by giving away assets within the last 5 years. In other words - if this is like the facility in Maryland - if you didn't have any money, you couldn't get into their facility in the first place.

It would be a better deal if your parents were younger and in need of alternate living arrangements. It's the 260k deposit (not to mention the house which they would sell if your parents' expenses exceeded the $260k) that gives me pause though and I'd definitely want all my questions answered before making any commitments. If on death, any unused portion is returned to the estate of the deceased as opposed to being kept by the CCRC, well, that's fine. But you would want, and have every right to expect, an accurate and detailed accounting of every expense incurred - down to the last penny!

On the other hand - my Mother was a private pay resident of an excellent long term care facility to the tune of approx. 5k per month. She was only there for 11 months and the tab was close to 60k altogether. However, she did not have to put up a deposit or sign over her house and assets - with her financial POA, we just had to write out one of her checks every month. Had I not taken care of her at home for the previous 5 years, her nursing home expenditures would have definitely approached the 250k plus mark. But again, her other income generating assets, Federal Employees survivor's pension, etc. were all available for her to be able to pay her own way.

There's enough anxiety over having parents who can no longer live in their own homes - any undue anxiety over the money aspect of it all makes it worse, in my opinion. If they can't or won't answer questions to your satisfaction and you still have reservations - I'd say, look elsewhere.

    Bookmark   December 30, 2007 at 12:38AM
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duluthinbloom, this facility IS in Silver Spring, MD. It is Rightwood, one of many, many owned by the Erickson corp. I don't think what they do is illegal in any way, but it certainly is not the solution that fits our family.
Fortunately, my parents have taken a second look, and as of now, have decided not to go. Unfortunately, my brother is not speaking to me for messing up this "wonderful" plan. There was a LOT of pressure put upon my very old parents and that alerted them that maybe this was not such a good idea. I don't know if they will be persuaded in the future or if they will cave in or what will happen, but I intend to be as vigilant as possible and I thank all of you who have responded with your information and opinions! Happy New Year.

    Bookmark   January 1, 2008 at 3:29PM
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there are very nice assisted living homes where you can maintain your independence without money up front. I visited a friend of my SIL in her apartment and it cost $1,500. a month. It had a bedroom and living room with a small kitchen area between the two rooms. She had a private entrance, a place to park her car. She had to eat one meal a day in the dining room and could eat all three if she liked. She had housekeeping and laundry for that price. It was brand new and had a care home nearby if needed.

    Bookmark   January 6, 2008 at 8:01PM
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I like the end of your first paragraph in your Dec. 28 message,

" ... maybe they are taking off."


ole joyful

    Bookmark   January 7, 2008 at 5:05AM
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My mother went into one of these facilities when she was 75 years old. She was in the early stages of Alzheimers and we told them that information. It depends on what size apt. they go into. My mother had the smallest studio and we paid $50,000 endowment plus $1200.00 month fee.
I would not put them in this place because of their advanced ages. You will lose all their money when they pass away. Find a place with a higher monthly fee that doesn't ask fow an endowment. Otherwise you can hire someone to look after them in their own home. Check these places out very thoroughly and definately use a lawyer.

    Bookmark   January 8, 2008 at 2:02PM
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Update: I misspoke, the place is Riderwood,not Rightwood, in Silver Springs.MD.

My parents decided not to go. They got a HUGE amount of pressure from other family members: the soft sell, then the hard sell, then the scare tactics. My brother and his wife are not speaking to us, the $1000 deposit is still pending return. My parents also had to shell out $300 for a social worker to "evaluate" them. What a racket!

    Bookmark   January 12, 2008 at 11:36PM
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