RAKEFT SHFAIM - PEACE OF MIND: MOVING TO ASSISTED LIVING

With lengthening life expectancy, demand among older people for appropriate housing solutions is escalating. From Indpendent living to sheltered housing, construction is booming, according to Attorney Rakefet Shafaim. A former legal advisor to one of Israel’s largest sheltered housing chains, she is an expert in assisted living for the elderly. Her law office specializes in housing solutions for this sector, and has unique proficiency in working with foreign residents — both those living abroad who want to return to Israel, and those whose children live outside the country.

Transitioning to sheltered housing triggers many questions and concerns, on the part of both residents and their children. Accurate and accessible answers guard against anxiety and financial loss, says Att. Shfaim.

“First, it’s important to distinguish between independent living and nursing care,” she explains. “Independent living is in a residential complex, and is appropriate for people who can live independently and manage their own households — with or without ‘partial assistance,’ which means with help from a caregiver.”

There are key parameters to be considered in choosing a facility, she continues. Of key importance is its geographical proximity to where the client’s grown children live. Also central is the ‘character’ of the facility — the kind of people who live there, the onsite activities offered, and the services provided (and whether these services are covered by the monthly fee). Then there are the types of living units, whether the building is multistory, the kind of outdoor space it has. And crucially, of course, the costs — whether they are compatible with the client’s budget, increases to which they may be subject. Att. Shfaim’s office helps clients and their families, and particularly those coming from abroad, map the process, and accompanies them through it.

Financial arrangements: three possible payment routes

An assisted living transaction generally comprises two types of payment, explains Att. Shfaim. One is a one-time deposit, which buys the right to occupy a housing unit, and the other is monthly payments, which cover maintenance, services and entertainment. There are, she says, three possible payment routes, but clients should beware. One that seems economically tempting may harbor landmines that explode in the future. Each must therefore be carefully weighed, and clients should not hesitate to request adjustments within the route selected.

The classic ‘deposit route’ is based on a large one-time payment of hundreds of thousands — sometimes millions — of shekels. This deposit will erode annually by about 3 percent + VAT for 12 to 15 years (depending on the housing facility and whether the unit purchased houses one or two people). At the end of the deposit period, the tenant or heirs receive the balance.

The second track is the ‘entrance fee route.’ This, too, involves a one-time payment, but only some 60 percent of that paid for the deposit, and its erosion lasts only four years. “This option is for those without sufficient equity for the deposit, or who want to keep their previous home as a source of financing,” explains Att. Shfaim.

The third route is the ‘rental route,’ in which monthly payments are made, without any deposit.

Whichever route is selected, emphasizes Att. Shfaim, clients must ensure they have financial oversight — that they are informed about the collateral the facility provides, cost-of-living indexation, caregiver charges, what is included in apartment maintenance, and more. “Clients must also know that their maintenance fees and deposit erosion are subject to VAT,” she says. “Some facilities don’t take the VAT on erosion from the deposit, and clients are required to pay it from their pockets. Differences in financial arrangements between facilities should be known and factored into the cost calculations when selecting a new home. In senior living complexes still under construction, even greater vigilance is required, particularly concerning the linkage between the deposit and the cost-of-living index.

A housing contract that anticipates the future

Moving into assisted living triggers questions not only about the present, but also about the long term, which is essentially the soft underbelly of the deal. “These are issues which must be reflected in the contract,” says Att. Shfaim.

One of the questions she is most commonly asked is: “What if we’re not happy in assisted living and want to go back home?” Her answer is: “According to the law, 14 days’ notice of termination of the contract may be given during the trial period, and 90 days’ notice thereafter. This should be in the contract.”

Another key point that the contract must cover is potential changes in the status of the client over the years. “A couple may move into assisted living together, but, in time, one of them may be left alone there,” says Att. Shfaim. “The contract should include a financial mechanism that allows a couple’s housing unit to be downsized, if necessary. Or the health of a client may change, requiring the housing of a caregiver in the unit and the incumbent costs. This, too, should be addressed in the contract from the outset.”

Moving a family member from overseas to assisted living in Israel

In the special service they provide to foreign residents moving into Independent living in Israel, the office of Att. Rakefet Shafaim addresses an additional layer of need.

“These clients often have only fragmentary information,” she says. “Our role is to ensure that everything they need to know about their move is both easy and accessible. With them and their families, we start by charting the solution that will best meet their needs. When we reach that solution — assisted living, sheltered housing, nursing care — we examine the different options available until we reach what is right for them. And once that’s identified, we handle all the legal arrangements.”

in cooperation with the office of attorney Rakefet Shfaim