Formost parents, estate planning is about passing on wealth. For parents of children with special needs, it’s about passing on peace of mind. They know that the Will can act like a reliable system of financial security that outlives them and provide their children with security and dignity.

Over the past few years, families have moved from informal arrangements to private family trusts, formal guardianship and professional trusteeship to ensure protection, continuity and compliance. The goal is simple: keep life financially stable and dignified for the child, while keeping family harmony intact.

Why a will alone isn’t enough?

A typical Will may suffice for heirs who can manage their affairs. But for children with special needs, parents need a structure that protects assets and directs spending toward care. This structure should also outlive caregivers. In India, the Indian Trusts Act, 1882 enables parents to create private family trusts tailored to a single beneficiary’s long term needs—during their lifetime or via a will (testamentary trust). Crucially, trusts can be drafted to specify how money is used (therapy, housing, assisted living, education, assistive technology), and who decides.

Trusts are recommended for such families, because a simple Will won’t ensure day to day supervision or provide an enforcement mechanism for caregivers to follow parents’ wishes. The trust can act as a safety vault with instructions.

A trust is a legal arrangement under the Indian Trusts Act, 1882, where assets are transferred to trustees who manage them for the benefit of a named beneficiary.

Key features:

Continuity:Trustees manage funds even after the parents’ lifetime.

Control:The trust deed specifies permissible expenses and investment guidelines.

Oversight:The trustee can oversee the expenses of financial needs of the beneficiaries extending another layer of oversight and protection for the beneficiary.

It is important to plan the trust efficiently with due thought and consideration to key parameters like the trustee, the succession plan for the trustee, the guard rails within which the trustee will function, the distribution guidelines, the investments guidelines, etc. This will ensure that there are adequate controls to protect the beneficiaries.

Guardianship: A Critical Legal Step

Upon attaining majority, a person with disabilities is legally considered an adult. If they are unable to make independent decisions, parents must secure legal guardianship under the National Trust Act, 1999. Applications are processed by Local Level Committees, and guardianship enables decision-making in financial and personal matters. The Rights of Persons with Disabilities Act, 2016 further introduces the concept of limited guardianship, ensuring decisions are made with the individual’s consent wherever possible.

The guardian of the child and the trustee/s of the trust can be different people to introduce additional layers of protection.

Emerging Trends

Trusts over wills:Families are increasingly opting for private trusts to avoid probate delays and maintain confidentiality.

Hybrid structures:Combining wills for clarity with trusts for operational continuity is gaining traction.

Professional trusteeship:Families prefer appointing one family trustee and one professional trustee to balance emotional involvement with technical expertise.

Care documentation:Detailed letters of intent outlining routines, medical contacts, and preferences are being integrated into estate plans.

An approach for families

Assess lifetime needs:Estimate expenses for housing, healthcare, and living costs for 40–50 years beyond the parents’ lifetime.

Create and register a trust:Draft a comprehensive trust deed and register it if property is involved.

Appoint trustees and successors:Include a mix of family and professional trustees for continuity.

Secure guardianship early:Apply under the National Trust Act before the child turns 18.

Fund the trust strategically:Transfer assets and assign life insurance proceeds to ensure liquidity.

Document care protocols:Prepare a care playbook to guide future trustees and caregivers.

Review periodically:Update the plan every 2–3 years to reflect changes in law and family circumstances.

Estate planning for a child with special needs is a commitment to lifelong security and care. By combining legal guardianship, a well-drafted trust, and professional trusteeship, families can transform uncertainty into assurance.

(The author is a Managing Director of Kotak Mahindra Trusteeship Services Ltd.)