This column presents general information regarding estate and disability planning and probate. It is not intended to ceate an attorney-client relationship or constitute legal advice to readers. Individuals with legal concerns should consult with an attorney for advice regarding their specific circumstances.

It has been my experience that most people, as they get older, want to stay at home and age in place. If you are healthy and do not require long-term care, you can do just that. But, the vast majority of individuals aged 65 or older will, at some point, require long-term care. Moreover, the cost for such care can exceed $100,000 annually. And, the majority of you probably do not have long-term care insurance.

So, unless you are wealthy, or you have family members willing to help pay for your care, there is a good chance that you may end up somewhere other than your home. Are you willing to take that chance?

One option you may want to consider is moving to a continuing care retirement community. A CCRC is a community offering independent living, assisted living and nursing home services all on one campus. Ideally, one would enter a CCRC while still able to live independently and only if the need arose, move to the assisted living or nursing home portion of the community.

In other words, a CCRC enables a person to reside in that community for the remainder of their life. Not only do these communities offer a safe environment for seniors, with access to medical and nursing services, but they also promote socialization and an active lifestyle, both of which lead to a healthier and better quality of life.

If you are considering a CCRC as an option, it is imperative that you understand both the costs and the benefits.

What are the costs associated with CCRC’s? First, most CCRC’s will have a processing fee that is a one-time, nonrefundable fee used to determine the financial, mental, and physical eligibility of an individual seeking admission to the community.

Second, the CCRC will charge an entrance fee. The entrance fee is an amount of money paid to the CCRC to assure a resident continuing care for life. Often, this amount is based on the type of living accommodation the resident will occupy. Most entrance fees exceed $100,000 and can be substantially more.

Third, the CCRC will have a monthly charge that is similar to rent, and again, will be based on the type of living accommodation the resident will occupy. Generally, the monthly charge covers all utilities including water, heat, electricity, and air conditioning, but not telephone, cable, or internet. Also, the monthly charge usually includes at least one meal per day and light housekeeping weekly or every other week. Additionally, the CCRC will provide the resident with a list of other services that are available for an additional charge.

Am I entitled to a refund if I terminate the contract or pass away? It depends. Many CCRC’s offer several refund options. Some will offer a full refund and others may only offer a partially declining or fully declining refund. Oftentimes, under a partially declining refund option, if you terminate the contract or pass away during the first 25 months, you will be entitled to a refund of the entrance fee less 2% per month of residency. Then, after 25 months of residency, if the contract is terminated, you would be entitled to a 50% refund of the entrance fee. A fully declining refund option, however, generally continues to decrease each month by 2% and after 50 months, you are not entitled to any refund.

But, buyer beware! Even if you are entitled to a refund, many CCRC contracts provide that no refund will be due to you until the CCRC has entered into a contract with a new resident who has paid the entrance fee for the unit formerly assigned to you. Usually there is no requirement that the CCRC assign your unit to the next new resident. Thus, if you do decide to move from the community and you are entitled to a refund, it could be many months or more before you actually receive that refund.

The Maryland Department of Aging provides a comprehensive consumer information packet for persons interested in learning more about these communities, the law and the regulations governing these communities. To request a packet, go to the following web address: www.aging.maryland.gov/CCRC.html. As Benjamin Franklin so eloquently articulated, “If you fail to plan, you are planning to fail.”

Jessica L. Estes is an elder law and estate planning attorney at ERA Law Group, LLC in Annapolis. She can be reached at (410) 919-1790 or via email at jestes@eralawgroup.com.

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