What to consider when buying into retirement villages and aged care facilities

The time comes to leave your family home and move into a retirement village or aged care facility, but how do you choose where to move to and what are the mistakes you need to look out for?

It’s a complicated process and one Bennett & Philp lawyer Charlie Young said far too many rush into without undertaking the proper research.

While it may not be something many like to think about in their 60s, like creating a will, it’s necessary to at consider your options while you are young and healthy enough to make the decision. After all, you don’t want to end up in a place that doesn’t cover your needs, or you simply don’t like.

According to Young, making rash decisions and not thoroughly investigating all options, leads to the most amount of problems when moving into future abodes.

“People need to be planning well ahead, not only researching, but also thinking about location, their community interests, where they would like to be residing, who is likely to be visiting and if they can afford the cost of the facility,” he told Starts at 60. “You should even go to potential facilities and speak to staff and residents to get a feel for the place and whether it will be the right place to settle. Quite often people don’t like to think about these things, but the older we get, the more difficult it can be to process this information.”

As more people choose to stay in their homes for longer, it’s often the case that the decision to move into an aged care facility or retirement village is left until the last minute as health diminishes. For many this means they aren’t financially prepared or are thrust into the wrong kind of facility for their needs.

According to Young, while it may seem like a simple process to begin with, buying into a retirement village or aged care facility is in some cases more complicated than purchasing a house.

“People often don’t consider their health needs and the level of care they will require,” he explained. “I am finding these days more and more people are staying at home longer, by the time they need to move out of their own place they are quite often starting to lose capacity and in these cases the decision of where they go is taken out of their hands.

“This is why it is so important to plan early. I see instances where people believe they have mental stability and can sign an agreement, but the facility refuses to enter into a contract as they aren’t satisfied that the person has the capacity to make decisions.”

For this reason Young said you should, as much as possible, be in control of the process and appoint a trusted person as an enduring power of attorney in case you are unable to follow through with your wishes for retirement living and aged care. On top of this you should speak to your loved ones about your plans, so if it’s not written down, at least they still know where you would like to reside.

“It all comes back to planning and regularly considering who you want as the attorney. It needs to be someone who is trustworthy and will not abuse their rights, otherwise you could be placed in a cheap facility that doesn’t provide adequate care,” he said. “Unfortunately I see this mistake made quite often, as children in particular see their parents’ assets as their inheritance.

“You can change your plans over the years and who you appoint as the power of attorney, but this needs to be done when you have the capacity to make the decision, because if anyone suspects you don’t, the change is invalid.”

Lastly, Young suggested meeting with a financial planner before locking in to any contracts, to ensure you have the necessary funds to make a purchase. “It’s important to get financial advice early, many don’t fully appreciate the costs involved in going into aged care or a retirement village and find themselves struggling with funds later on,” he explained. “It’s not a pleasant thing to think about and some may not like spending money to get advice but if you don’t, legal issues could arise and the costs become enormous.”

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.