Plan the financial security of your special needs child


Parents who have a special needs child must consider how to make sure that she or he will have the financial resources to be comfortable throughout their life. When future necessities include medical care, helpers or caretakers and financial support once the parents are gone, it becomes important to start planning early. Here are some guidelines on how to prepare.

Decide on a guardian: You will need to appoint a legal guardian for your child in case something happens to you or your partner. The guardian will be responsible for taking care of your child and making decisions on behalf of her or him, at least until the legal age of adulthood, or beyond, depending on your child’s mental condition. You may have help now from friends and family members such as your child’s grandparents, but someone else will need to step in once the helpers become older and you the parents are also unable to take care, or in case of your death. Choose someone you trust and who is close to your child and likely to outlive them. Make sure that this arrangement is recorded in a legally binding agreement, and get a lawyer to advise you on the terms and conditions that will suit all parties best.

Set up a financial trust: You need to make sure that your child is always financially secure, even in the event of your passing. Creating a trust fund is a good option. You can appoint a trustee to handle it – a family member or friend who has some knowledge in this area would be best. This person will be in charge of handling the paperwork of the trust, such as ownership documents and compliance of the tax liabilities. In India such tasks can take up a lot of time and energy, so whoever you pick will also need to be able to devote their efforts to this, should the need arise. Some people even choose institutions such as a bank or a firm to handle these trusts. Whoever you choose, they should be credible and reliable.

Funding the trust: You will need to set aside enough money for the rest of your child’s life. To help you accomplish this task, you first need to list the most important and current expenses you have to take care of. Then take into account future expenses. That could include the cost of routine equipment (if necessary) or the need for a caretaker. When accounting for this, remember to factor in criteria such as inflation rate. Once you have an approximation of how much you need you can start identifying the assets you have that could be enlisted in your child’s trust. It is advisable to also have a decent life insurance cover in case of your untimely death. A good term insurance plan can ensure your child’s financial needs are met even if you are not there.

While the task may seem daunting and unpleasant, putting it off for too long will not leave enough time to properly create financial security for your loved one.

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