This is a tale of someone who believes he was wronged.
He couldn’t do anything to help himself, but he’s on an admirable mission to help others.
His goal is to protect those who pay fees to Continuing Care Retirement Communities, or CCRCs, which include assisted living facilities, independent living communities and long-term care units.
CCRCs are attractive to some seniors because they offer a place to live without ever having to worry about moving for health reasons.
There are 25 such facilities in New Jersey housing more than 10,000 seniors, according to the Organization of Resident Associations of New Jersey (ORANJ), a group that supports CCRC residents.
When seniors move into a CCRC, they often pay a large entrance fee that can cost several hundred thousand dollars. Contracts typically say a percentage of that fee will be returned to the resident’s estate, but not until the unit is reoccupied by a new resident.
That policy has made a mess for Ed Nagle of Whitehouse Station for more than six years.
Terry Nagle in 2006.Ed Nagle
His mother, Terry Nagle, became a CCRC resident in 2004. She agreed to pay a $272,821 move-in fee, expecting her estate would receive a 90 percent refund, or $245,538, when she died.
The grandmother of six and mom of four, known for her sparking blue eyes, Irish wit and love of bowling, swimming, sewing and her church, died in 2010 at the age of 84
Ed Nagle was in charge of her estate.
When Nagle tried to get back the 90 percent refund from the CCRC, he was reminded of the contract, which said his mom’s unit had to be reoccupied first.
“I was pretty patient waiting for the refund for the first two years,” he said. “Following that I made very regular queries. Some communications became contentious as my patience was running out.”
Nagle, who works as a salesman, said he offered several times to help find a new resident, but he was turned down. He even had a friend look at the CCRC for his own mother, but, Nagle said, his mom’s unit was never offered.
In the meantime, his mother’s estate filed its tax returns. Including the anticipated CCRC refund, it owed $14,820 in estate taxes, which was paid in June 2011.
Nagle continued to ask the CCRC for updates, but the unit remained empty.
Then came what Nagle called “soft extortion.”
“‘Would you be willing to spend $30,000 to 40,000 to renovate the unit your mom occupied but did not ‘own’ to help facilitate or enhance the potential to resell or reoccupy her unit?'” Nagle said he was asked multiple times.
He wouldn’t have it.
Ed Nagle’s car when he launched a protest outside of the CCRC that held nearly $250,000 due to his mother’s estate. Ed Nagle
Nagle staged a protest, hanging a banner on the back of his car, which he parked at the community when it held an open house.
“Thinking of moving here?” the banner said, adding “For additional perspectives, call…” and it included Nagle’s phone number.
“The result was mayhem,” Nagle said, with the CCRC trying to block his banner and calling police. Nagle moved off the CCRC property but he remained on the street outside.
“I believe this hand-to-hand combat move finally got the CCRC to try to settle,” Nagle said.
By now, five years passed and the unit still wasn’t reoccupied. The family reluctantly cut a deal.
Rather than take the 90 percent refund, they accepted 63 percent of the value, or $171,877 — $73,661 less than they were supposed to get.
And if that wasn’t bad enough, there was more.
The lower refund meant Terry Nagle’s estate was no longer subject to estate taxes. Nagle asked the state for a refund of the overpayment, but alas.
“Surprise — a catch-22. There is a three-year statute of limitations on refunding paid estate taxes,” Nagle said. “So our family got ripped by the CCRC and then ripped by the state of New Jersey.”
The estate was out the $73,661 from the CCRC refund plus the $14,820 in estate taxes that were never really due, or $88,481 in all.
A FIX TO PROTECT FAMILIES
Nagle wanted to make sure this never happened to another family, and he saw two other states had legislation on the matter.
In Connecticut, refunds must be provided within three years of a vacancy. for contracts after Oct. 1, 2015. In California, as of 2017, the state requires 4 percent interest be paid on refunds not returned within 180 days after a vacancy, and 6 percent after 240 days until the full refund is granted.
Nagle reached out to Sen. Christopher “Kip” Bateman (R-Somerset).
The result was S3225, which would require CCRCs to give refunds within a year of a vacancy — a much more reasonable time frame that would eliminate the estate tax refund issue. Sens. Bucco and Allen also signed on.
But in the last legislative session, nothing happened. It sat in committee without a hearing.
“There was always some excuse why no action was taken. ‘Maybe next session,’ ‘Other priorities,'” Nagle said.
It was reintroduced in the current session as S182.
Nagle kept nudging.
He said he got more excuses. Concerned that a political action committee or lobbyist was fighting for the other side, Nagle reached out to Bamboozled.
GETTING IT DONE
Bateman’s office said it was waiting for Sen. Joseph Vitale (D-Middlesex), chair of the Health, Human Services and Senior Citizens committee, to move on a hearing.
A spokeswoman said Bateman believes this is a financial hardship, and said the office had heard from other constituents on the matter.
We reached out to Vitale, and while we waited for a response, we asked some insiders about the issue.
LeadingAge is an association of not-for-profit senior care organizations
National spokesman Stephen Mass said the group doesn’t necessarily oppose a reasonable timeline on returning entrance fees.
He said these policies were instituted during the recession when the real estate market was soft, but that’s no longer the climate.
“I think most of the time units turn over in a year,” he said.
The New Jersey chapter of LeadingAge didn’t respond to our inquiries.
The Nagle family gathers to celebrate the life of Terry Nagle after her funeral. Pictured left to right in the back row are Terry Nagle’s grandchildren Ed, Dan, Justin and Gavin, and her children Ed and Anne. In the front row left to right are Terry Nagle’s children Kathleen and Richard, and grandchild Erin.Ed Nagle
ORANJ, the group that represents CCRC residents, has been working on this issue for several years. The group’s president, Ron Whalin, said the state’s LeadingAge chapter strongly opposes the bill.
Whalin said new legislation cannot change existing contracts, but it could help future residents.
“If new contracts are based on sound actuarial principals, the CCRC management and residents will both be happy,” he said. “There are many signed contracts requiring ‘sale’ of the actual unit before refund of entrance fee. These contracts should not have been signed but the residents did not understand the ‘fine print’ in the contracts.”
ORAJN said it reached out to Vitale to request a meeting, but it hadn’t heard from the senator before publication. It is meeting with Bateman on March 1, it said.
We then reached out to Assemblywoman Nancy Munoz (R-Union), who serves on the Assembly’s Health and Senior Services committee, to see if she’s heard of this bill in her house.
When she learned nothing had been introduced, Munoz jumped on, and A4588 was born.
“It is unconscionable for a facility to keep a deposit two, three or four years; holding families hostage and preventing them, in some instances, from finalizing an estate,” Munoz said in an emailed statement.
Then we heard from Vitale, in whose hands the fate of the Senate bill rests.
He said CCRC organizations contacted him, and as a courtesy, Vitale agreed to a meeting before having a hearing on the bill.
When, we asked? Why the delay?
Vitale responded with a promise.
“I will speak to them sometime in February, and we can have a hearing on the bill sometime in March,” Vitale said.
Nagle is eager to have the bill heard in committee, even if it never advances.
“I hope that our state representatives will do the right thing and represent their senior citizen families by enacting and requiring a common sense and fair time limitation to repay the refundable CCRC entrance fee,” Nagle said. “If New Jersey required this like other states do, my family and many other families would not be victimized by CCRC operators.”
We’ll keep you posted on the legislation.
Have you been Bamboozled? Reach Karin Price Mueller at Bamboozled@NJAdvanceMedia.com. Follow her on Twitter @KPMueller. Find Bamboozled on Facebook. Mueller is also the founder of NJMoneyHelp.com. Stay informed and sign up for NJMoneyHelp.com’s weekly e-newsletter.
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