Financial planning for your child with special needs

This article is created based on the information shared by financial advisor Mr. Jitendra Solanki. He shares some simple tips on secure financial planning for your children with additional needs.

• How much funds would be enough to support your child’s lifetime care?
• Do you have insurance enough to support other family members in the care of your child with additional needs?
• Are you familiar with government benefits for your child?

These are some important questions that parents should ponder over to understand ways to secure finances for their children. So, how and where do you begin?

Understand the legal terms 

Will : A will is a legal document in which an individual expresses their desire how the assets should be distributed to family members after their demise.

Trust: A legal agreement for management, upkeep of the child who is the benefactor of the trust. The trust deed defines the objectives, management, power of trustees, preservation and distribution of income to the child.

Guardianship: The legal procedure of appointing a person to oversee an individual’s life decisions. The appointed guardian will look after the individual’s needs under their care, while overseeing any legal duties that need to be undertaken on behalf of their ward.

Letter of Intent (LoI) : It is not a legal document, but a description of your vision and goals for your child’s life. 

Understand the roles of individuals in your legal document

Will executor/Alternate Will executor: Initiates the proceedings of will execution

Settlor: Initiates the process of the formation of the trust

Financial caretaker: Organizes and handles the financial affairs of your child with additional needs

Trustees: Manage the trust

Guardian: Organizes and handles the personal affairs of your child with additional needs

8 Point plan to secure your child’s financial future

1. Reflect on your personal assets – Begin by understanding what resources you already have—this helps you plan with confidence.
2. Draft a LoI – Capture your hopes, values, and guidance for your child’s future in a document that loved ones can follow.
3. Consult a trusted financial advisor – Seek professional support to design a plan that balances security with independence.
4. Assign supportive legal roles – Identify individuals who can play meaningful roles in your child’s life and formalize their responsibilities.
5. Write a Will – Ensure your wishes are clearly documented to protect your child’s long‑term wellbeing.
6. Appoint a settlor to form a Trust –  A Trust can safeguard assets and provide structured support for your child’s needs.
7. Apply for legal guardianship – Share your LoI with the guardian so they understand your vision and priorities.
8. Inform close family and friends – Communicate openly about the guardianship, Trust, Will, and LoI so everyone feels included and prepared.

Sorting finances for your child with special needs through a will and a trust

1. The Will executor will initiate the will proceedings. In the absence of the executor an alternate will executor is responsible for these responsibilities.
2. Parents write the Will whereby a trust is formed and and distribution of assets takes place
3. The trust is formed in the presence of a settlor and is managed by trustees
4. The finances as part of the will and the trust are overseen by the financial caretaker
5. Whereas the guardian is entrusted with the personal affairs of the child – the trust beneficiary.

Distributing the personal and financial affairs of the child

What are your options?

1. Your child – the trust beneficiary can be entrusted to a guardian, who takes care of both the financial and the personal aspects of the child.
2. A separate financial caretaker and a legal guardian can be appointed who carry on their roles individually.

Understand the Will and probate proceedings

• What is a probate process in legal proceedings?

It is a legal proceeding whereby the executor is given the legal rights to ensure the will is executed rightfully. 

• Is the probate process mandatory?
  • The legal probate process is mandatory within the metropolitan jurisdiction of the high courts of Mumbai, Chennai and Kolkata. 
  • It is also applicable to immovable property within these limits.

• How long does the process take?

This process may take anywhere from 6 months to the amount of time governed by the case.

• In what situations is the probate process mandated by the court?
  • If the beneficiary or the executor has to establish any legal rights over the property or assets of the deceased.
  • If there is no executor of the will.
  • The deceased has multiple assets and any of them fall in the above mentioned situations. 

• Will and Probate proceedings: what do you need to do?
  • Parents write the will and appoint a will executor.
  • The will executor may choose to execute the will OR
  • Files for probate proceedings in the court of law
  • The court may then invite legal objections from the heirs regarding the inheritance proposed in the will.
  • If there are any objections raised, the court will try to address any objections before the execution of the will.
  • If there are no objections, the court then issues a certificate for the execution of the will.

Create a Trust at the earliest, for your child’s benefit

• When parents create a will and an executor, the will may be executed or may be subjected to probate proceedings. 
• In order to prevent such situations, parents may form a Trust. Any assets that are part of the trust funds are not impacted by legal proceedings, if the will enters probate proceedings.

Therefore, a wise move will be to create a trust fund as early as possible.

Every family has concerns about the needs and care of their child in their absence. This concern requires urgent attention, especially in families with a child who has special needs. It is good to be prepared to ensure the child’s future is secure in the absence of the primary caregiver. Applying for Guardianship is one of the first steps toward securing your child’s personal well being. If you are a parent who has a child with a disability, you should start thinking about financial planning for your child with additional needs.

You may come across many terminologies in this presentation that you may like to learn more about. Please consult other articles we have posted on Nayi Disha’s web page, shown below –

Learn more about the components of a Letter of Intent(LOI)

Tips to write a Will for your child

Common queries on picking the right Guardian for your child

Questions about setting up a Trust for your child

All other queries pertaining to financial planning for a special child

If you’re seeking more information and guidance on this topic and related areas, Nayi Disha’s Know Your Rights (KYR) Program is here to support you every step of the way. By joining, you’ll gain access to valuable resources on government schemes, benefits, financial support, legal rights, and more, all aimed at securing a brighter future for your child. To learn more, visit our chatbot by clicking this link: https://bit.ly/4dJVCP3, or simply type ‘KYR’ on our helpline number 844-844-8996.

DISCLAIMER: Please note that this guide is for information purposes only. Please consult a financial advisor for any legal consultations or advice pertaining to your financial planning needs.