Submitted by Anonymous on Wed, 09/28/2011 - 08:23
Posted in
My wife and I are looking (so far just on the Internet) at a continuing care retirement community in Massachusetts. This place has an independent living retirement community along with an assisted-living facility and a nursing home. Seems like a lot of money, with both a one time fee and monthly fee. I'm wondering if there is some legal or tax advantage to going to a place like this? In other words, what are the benefits?
Benefits of CCRC
I believe the decision to enter a Continuing Care Retirement Community should be made in conjunction with your other estate planning goals and strategies. For that reason, I would discuss the option with your estate planning attorney or other tax advisor. If you decide to enter a CCRC, I would also have your attorney review the contract (before you sign) and explain your obligations under the document. Having said that, I believe those who choose a CCRC can deduct part of any non-refundable entrance fees or monthly fees. (See IRS Revenue Rulings 67-185, 75-302, and 76-481). However, again, discuss that potential with your attorney.
Beyond the tax benefits, my understanding is that many people like continuing care retirement communities because they offer some level of certainty about the future. If you start out in the independent living community you typically get social activities, exercise options (such as a pool), housekeeping services, and on-site health care. Perhaps more importantly, a CCRC offers a continuum of care which, in most cases, allow residents to stay in the community for the rest of their life. They may have to move to a higher level of care, such as assisted living or nursing care, but they will not have to move to another facility. This stability may be especially helpful for couples who require different levels of care. But even individuals may appreciate staying in a community with the friends and neighbors that they meet over the years. Hope that helps.