Family Business: It's all about living the good life

We all strive for quality of life, defined by many as meaningful time with family, financial success, strong faith, lifestyle and health. As advisers, I believe we have a responsibility, to serve families on all levels. Financial success cannot be isolated without considering what it brings to the table, and this includes preparing for life transitions.

What happens next? Most people who are older than 70 ask themselves. Many are actively thinking about it and in more recent years aggressively planning for a transition they believe will need to happen. Financially successful families are more apt to address the next stage living question as they know the difference in lifestyle that a mere happening in health or agility can bring, let alone a true medical hardship.

Continuing Care Retirement Communities are growing as people want to control the decision and outcome for continued independent living to skilled care. The family discussions center around which community and when versus whether a decision should be made.

Your adviser should help you prepare for prevention versus crisis planning. Wanting lifestyle regardless of age is evident in the 80s plus population of vibrant active residents in Florida communities.

In the 1800s, longevity was age 47; by the 20th century life expectancy hit 76.5, today if you’re 90 you are playing golf, boating, attending lectures and perhaps even skydiving.

At age 60, baby boomers are taking an active role in planning for concierge services to skilled health care needs for the long term.

Primary options for what I term “continued lifestyle communities” available in our area differ based on how health-care coverage is provided and paid for, as well as options you select.

Choices include remaining equity percentage to beneficiaries, equity deeded ownership, straight entrance fee participation or rental. Each Continuing Care Retirement Community has its highlights, but most important after the health-care consideration is the community itself.

You are to become part of that community and want it to offer what is most important to you.

Continuing Care Retirement Communities are categorized by the type of facility and subsequently this affects the tax consequences of your residing there. This will make a difference in your net out-of-pocket costs, one of the considerations that generally factor in:

Type A: The most extensive agreement offering pre-paid healthcare when needs arise. An entrance fee is paid (many times a choice as to whether to provide partial return of equity at passing) and monthly fees. There is a deduction applicable to both, talk with your adviser before concluding the agreement. Planning can be accomplished to maximize tax benefits, ultimately resulting in lower cost to you. Though the monthly fee typically does not increase for utilizing full care in the community, corresponding medical deductions will go up from what was paid for independent living.

Type B: Here tax benefits are diluted and may be more difficult to access. Healthcare as needed increases the monthly fee to the resident. Partial care may be offered in the base independent living fee, such as specified number of days for assisted or skilled care.

Type C/D: These communities offer concierge type services. You pay for these services as needed. Only Level C has an entrance fee and both have monthly fees, for which prepaid healthcare is not offered. A healthcare tax deduction may be possible due to a legal case that poses possibilities for a percentage allocation to the resident under a Type C plan.

When comparing options and costs, many factors are relevant to consider.

An adviser can review the current maintenance of your residence and lifestyle, the options available to you and assist you in determining your out of pocket costs.

You may surprise yourself with the minimum differences to transition to a new lifestyle continuing care community under independent living. Be sure the choice is yours and review your options early on, negating the unnecessary crisis moments too many families are facing today.

Kim Ciccarelli Kantor, president and founder of Ciccarelli Advisory Services Inc., a family owned and operated firm in Florida and New York, provides comprehensive financial investment and estate planning services for individuals, families and businesses.

Ciccarelli Advisory Services, Inc. is at 3066 U.S. 41 N., No. 202, Naples 239-262-6577.

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