Residents at continuing care retirement communities (CCRCs) pay large entrance fees for a lifetime of care and the expectation that heirs will recoup most of that money. That promise can vanish when a community fails.
Ten years ago, Joyce and Norman Cooper paid $946,000 to move into Harborside Retirement Community in Port Washington, New York, drawn by independent living, assisted living and nursing care all on one campus. Their daughter, Barbara, described the decision as the result of “doing everything right” — saving and buying a place meant to be home for the remainder of their lives.
Harborside filed for bankruptcy in 2023. It was one of at least 15 CCRCs to do so in the last six years. The collapse forced residents to leave and stripped heirs of promised refunds on entrance fees. Barbara Cooper had expected 80% of her parents’ entrance fee returned on their deaths, but that payout evaporated after the bankruptcy.
Families faced steep practical and financial consequences. Arline Cohen, 94, had to move out; her daughter, Bev, found a new facility that charged $10,000 more per month than Harborside. The family’s entrance fee — $710,000 — disappeared. Bev and other heirs have hired a lawyer and hope to recover a percentage, possibly about 30%, but the process is uncertain and slow.
The losses have emotional and medical impacts. After Harborside’s closure, Joyce and Norman Cooper, who moved there together, were split across different facilities because of changing medical needs. Barbara says the separation contributed to both parents’ decline: her mother died, and her father died three weeks later.
How CCRCs are structured
Many CCRCs use a model combining a large, upfront entrance fee and smaller monthly payments. In return, residents expect access to housing, services and health care as needs change. Contracts often specify that a large portion of the entrance fee will be returned to heirs when a resident leaves or dies. But facilities sometimes use those entrance fees as operating capital, and if finances deteriorate, returns to heirs can be reduced or eliminated in bankruptcy.
Bankruptcy trends and risks
Harborside was among at least 15 CCRCs that filed for bankruptcy in recent years, a trend that highlights systemic risks in the sector. When a CCRC fails, residents — especially those in assisted or memory care — can face disruptive moves, higher costs at new facilities, and the loss of promised refunds. Families may pursue legal action, but recoveries vary and can take years.
Practical takeaways for seniors and families
– Ask plainly about what happens to the entrance fee: how much is refundable, under what conditions, and how refunds are secured.
– Check whether the community holds entrance fees in escrow or has other safeguards.
– Review the contract with a lawyer who understands CCRC agreements and state regulations.
– Consider the financial strength and oversight of the provider; inquire about recent audits, reserve funds, and contingency plans.
– Plan for the possibility of increased costs if a facility closes or you must move to a more expensive option.
For families like the Coopers and Cohens, the promise of a secure, single-place retirement dissolved into relocations, legal fights and financial losses. The experience underscores that while CCRCs offer convenience and continuity of care, they also carry financial risk that consumers should scrutinize before committing large sums.