RESOURCES – Estate Planning Document Revised 13th June 2017

Putting your House in Order

We would like to think, when the time comes and we are unable to deal with our own affairs, we would have made it as easy as possible for the person taking on our affairs.  We would also like to think our wishes will be respected.  The information contained in this document is to assist you or your family some time in the future.

  1. An Enduring Power of Attorney:

2. An Advanced Health Directive:

3. A valid Will:

4. Some information about your Exit Entitlements from the Village owner/operator: If there is a dispute concerning the former Resident’s Exit Entitlement, affecting the money you leave behind, your beneficiaries will be unable to personally get involved if you have appointed the Public Trustee as your Executor of your Will. The Executor will need to seek advice in respect of obtaining your Exit EntitlementSuch an advisor would need to know the Retirement Villages Act.

Checklist for departing Residents in Leasehold or Loan/Licence Villages:

  • The Resident or their appointed representative should request the Operator to provide an Estimate of Exit Entitlement which must be provided within 14 days of the request.
  • The Resident must provide a Notice of Termination to the Operator giving one month’s written notice, provided the name and address of the Solicitor or appointed representative. The right to reside in a Unit or Villa is terminated on the death of the Resident.  If the Lease/License is in joint names, the other person can continue to reside but the lease or license will need to be amended.
  • The cost of drawing up the document amending the lease is may be lodged as a “book debt” by the scheme operator and set off against the Resident’s Exit Entitlement as an interest-free loan (RV Act, s.104).
  • Notify local post office, terminate telephone, electricity and rates accounts (if applicable).
  • Cancel any services being provided to the residence such as newspapers or other services.
  • Alter the Direct Debit or Standing Order arrangements with the bank for monthly service fees to a fixed amount that will cover the expected monthly charges. This can be varied later if necessary.

5. Reinstatement Costs: The definition of “reinstatement works” in the RV Act does not operate to limit the work an operator can do when a resident departs, However, it does limit the costs that can be recovered from the resident. If an operator performs a more substantial renovation that goes beyond the definition of “reinstatement works” they can only recover the costs that would have been necessary for a reinstatement, and then only to the extent that Resident has responsibility for those costs.  Where a more substantial renovation is proposed, a former Resident should request that a hypothetical quote for a reinstatement be obtained.

 

6. Cost of Sale. A significant component of the expenses incurred by a departing Resident is “Costs of Sale”. Many operators determine these costs by dividing their total annual Sales and Marketing budget by the number of Units sold.  The onlyCost of Sale” to be passed on the former Resident are those specifically incurred during the marketing of that particular Unit.  For such costs to be deducted from a Resident’s Exit Entitlement, they must be supported by documentary evidence confirming that they relate to the specific unit.

The total outlay for this process is then shared by the former Resident and Operator in the same proportion as they share the gross (New) Incoming Contribution. Within 30 days after the termination date, the outgoing resident (or their representative) and the operator are to negotiate and agree in writing on the proposed resale value of the unit. Take care that the unit is offered to prospective buyers on the same terms on which it was purchased (leasehold Vs freehold and with capital appreciation or without). Alternatively, the operator may choose to calculate the exit entitlement on the same basis but offer the unit for sale on another. Failure to do this may result in a significantly lower exit entitlement being received.

The operator must inform the former resident (or their representative) of all sales enquiries and the steps being taken to promote a sale each month preferably in writing, until a sale and settlement occur.

7. Your membership of ARQRV: As long as you remain a financial member of ARQRV, advice and assistance is available to you or your Executor or Beneficiary up to four months after your Exit Entitlement is received.

Please remember a bequest to ARQRV in your Will so we can continue our work.

8. Where to store your papers covering all these: You need a folder with papers about all the above, including your ARQRV membership in an easy to find place. It might even be a good thing to copy the lot and give it to your family members and/or Solicitor.

Revised 13th June 2017

 

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