Illinois Estate Planning and Elder Law Blog
A report by the Government Accountability Office (GAO) warns that given the weak economy Continuing Care Retirement Communities (CCRCs) are facing challenging times.
CCRCs offer the entire residential continuum of care – from independent housing to assisted living to round-the-clock nursing services – under one “roof”.
In its new report, “Continuing Care Retirement Communities Can Provides Benefits, but Not Without Some Risk”, the GAO notes that although few CCRCs have failed, “challenging economic and real estate market conditions have negatively affected some CCRC’s occupancy and financial condition”. The GAO’s report notes that CCRC residents “are at a disadvantage because any claim they have on a CCRC that is forced into bankruptcy is subordinate to the claims of secured creditors, such as tax-exempt bondholders and mortgage lenders”.
CCRCs generally depend on high occupancy rates to remain financially viable. Slow real estate markets like the current one can make it difficult for older Americans to sell their homes to pay CCRC entrance fees. As a result, occupancy levels at many CCRCs have fallen. In addition, some older Americans may be staying in their homes longer and thus moving into CCRCs when they need more care, which can worsen CCRCs’ long-term financial picture.
Contact an estate planning law firm for more information.