Continuing Care Retirement Communities

Continuing care retirement communities (CCRC) are fantastic options of seniors who are fond of planning ahead and controlling their living arrangements and potential long term care needs.  Having recently toured a fantastic CCRC modeled campus in Chautauqua County, run by Heritage Ministries, I thought that this issue was timely to bring to our blog subscribers.  

CCRC’s allow you to be very proactive in managing your living arrangements and long term care needs as you age.  There are trade-offs associated with enrolling in CCRC’s, however, as was highlighted in a recent New York court case last year.  Most notably, a resident is required to spend the assets disclosed in the CCRC’s admission agreement on nursing home care before applying for Medicaid. Good Shepard Village at Endwell Inc. v. Yezzi (N.Y. Sup. Ct., App. Div., 3rd Dept., No. 520621, Nov. 5, 2015).

Hazel and Peter Yezzi moved into a CCRC after signing an admission agreement that disclosed their assets. The contract with the CCRC provided that that the Yezzis could not transfer their assets for less than fair market value if it would impair their ability to pay their monthly fees. Mrs. Yezzi entered the nursing home, transferred her assets to Mr. Yezzi, and applied for Medicaid. The CCRC refused to accept the Medicaid payments.

The CCRC sued Mr. Yezzi (Mrs. Yezzi died in the nursing home) for breach of contract and fraudulent conveyance, arguing that the Yezzis were obligated to use the funds disclosed in the CCRC admission agreement before applying for Medicaid. The trial court granted the CCRC summary judgment, and Mr. Yezzi appealed.

The New York Supreme Court, Appellate Division, 3rd Dept., affirmed, holding that Mrs. Yezzi’s transfer of assets for less than fair market value constituted a breach of contract. According to the court, under federal and state law the CCRC “could require a resident to first spend the resources identified upon admission before applying for Medicaid” because “the essence of the CCRC financial model requires a trade-off between the resident and the facility, in which the resident must disclose and spend his or her assets for the services provided, while the facility must continue to provide those services for the duration of the resident’s lifetime even after private funds are exhausted and Medicaid becomes the only source of payment.”

The issues highlighted by the Yezzi case are illustrative of the fact that simply because medicaid law allows certain techniques to be used to protect assets, you still must be mindful of your other legal obligations, particularly those that you enter into with regard to other aspects of your living arrangements and long term care needs.  

If you live in Western New York’s Southern Tier and CCRC’s are of interest to you, I would highly recommend contacting Heritage Ministries to obtain some information on the various options they can provide you.  You’ll be glad you did.