Katie Smith Sloan penned a letter to the editor in response to the Wall Street Journal’s article on life plan community (LPC) bankruptcies. Sloan’s letter outlined that bankruptcies in LPCs are rare and that there are many resident protections at the state law and that LPCs engage in voluntarily.

The full text of the letter is below.

Regarding “Retirees’ Life Savings Can Vanish in Continuing Care Bankruptcies” (WSJ Pro Bankruptcy, June 13): It is important to note that bankruptcies of continuing-care retirement communities (CCRCs) are rare—less than 1% since 2020. Further, these bankruptcies are highly idiosyncratic, with unique circumstances that aren’t endemic to the CCRC model.

While any prospective resident should carefully vet contract terms prior to investing in a CCRC, many robust resident protections exist. Some state regulators provide safeguards that include requiring CCRCs to maintain escrow accounts for entrance fee refunds, debt-service and operating expenses, and to submit to periodic actuarial and in-depth financial reviews, to protect against possible loss. Moreover, many CCRCs voluntarily engage in these and other fiduciary practices.

Katie Smith Sloan

President and CEO, LeadingAge

Washington, D.C.