Thinking of downsizing or moving into a lifestyle village? If you have reached a stage in life where you feel your property is too big for your needs, you need to carefully consider your options. Choosing what may be your final home is not a decision to be taken lightly.
People need to be careful to avoid pitfalls that could see them out of pocket or living in unsuitable circumstances.
There are both financial and personal implications to consider when buying and selling property in your later years.
People often explore retirement living with the aim of simplifying their lives and creating more financial freedom. However, downsizing may not be as simple as moving into a smaller, more manageable and cheaper home. Expenses, such as real estate commission, legal fees and moving costs can all add up.
Careful consideration needs to be given to what will be done with any surplus funds, and you may want to explore setting up a trust to protect the ownership of your assets.
If you are looking at moving into a retirement village, it is important to understand the structure of the village. Are you getting a title, which you will own and be able to freely dispose of? Or are you constrained by an agreement with the owners of the village? In most cases it is not a title, but a license to occupy. It is important you know what is going to happen when you leave the village, either voluntarily, or as a result of your death. Leaving a retirement village often incurs a financial loss of capital.
The licenses, called Occupation Right Agreements, or ORA’s, are usually very elaborate documents. With a growing older population, Elder Law is becoming a specialist area of practice. Seeking specialist legal advice can help you navigate the growing number of options available. At Lyon O’Neale Arnold we have several Elder Law specialists who can help.