WHAT TO LOOK FOR IN REVIEWING LIFE CARE AGREEMENTS

(1) Does the contract provide that you are purchasing a service or a property interest that can be sold?

(2) Who is financially responsible for the operations of the community, and exactly what is that responsibility? Is the fiscal agent financially sound? Get a financial statement and an operations history before signing.

(3) What are the assets and debt of the community? What are the monthly fees and what are the procedures for changing them? Remember that provisions that don't allow for -- or limit increases -- in monthly fees may be attractive now, but could be the cause of later financial difficulties for the community. All included services and excluded services (along with the cost) must be listed.

(4) Make sure that the agreement refers to the unit you will be occupying and under what conditions you can remain there. Find out whether your contract can be terminated and under what conditions.

(5) Who makes the decision that you should be transferred to the nursing home component and under what conditions? If transferred, what are your rights to return to your unit if you are able? Are there additional fees if one spouse goes into the nursing home component and the other spouse continues to live independently? Will the independent spouse be required to move to a smaller living unit?

(6) Is there a sufficient "kick the tires" period during which you can cancel? If so, what is the financial penalty for canceling?

(7) Can you be removed against your will and, if so, under what conditions and what is the procedure? Are you locked into an arbitration. What are your protections against retaliatory eviction.

(8) What are the refund policies? What happens if a resident dies as to refunds?

(9) Do residents have the right to form an association? If so, does the association have any right to suggest management policy?

(10) Are you entitled to deduct your pro-rata share of real estate taxes on your personal income tax return?

(11) If the monthly fee is divided between medical and nonmedical expenses, can you deduct the medical portion on your taxes?

(12) What happens if you need nursing care and the community nursing component is filled? Will the community pay for your care elsewhere until there is room for you.

(13) Are there restrictions against remarriage if a spouse dies?

(14) What health, property, and other casualty insurance coverages do you have to provide as part of being a resident, and the amount of coverage required?