A recent query from Radha, a mother from Varanasi, highlights this concern. She wants to invest Rs 10,000 per month to secure her child’s future and is also seeking guidance on investments as well as insurance coverage for her son.
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Corpus creation alone is not enough
Responding to an ET Now query, financial expert Harshvardhan Roongta, CEO and CFP at Roongta Securities, emphasised that the goal is not just to build a corpus but to plan for multiple financial needs over time. These include immediate expenses, ongoing care, and long-term requirements that may arise decades later.Roongta said, “You need to create a corpus for multiple needs. It is not just about investing for the future. Keep in mind that there will be regular and immediate requirements, as well as long-term financial needs that may arise 20 or 30 years from now.”
He pointed out that financial planning in such cases has two key aspects—creating a corpus and ensuring proper non-financial arrangements. While investments can help build wealth, it is equally important to define how that money will be used and who will manage it.
Importance of legal structure and guardianship
Roongta highlighted that parents must consider setting up a legal structure such as a trust, will, or at least a guardianship letter. These documents ensure clarity on who will take care of the child and manage finances if the parents are no longer around.
In the absence of such arrangements, the responsibility may fall to the courts, which could appoint a guardian and oversee the administration of funds. This process can be complex and may not always align with the family’s preferences.
He stressed that documenting these aspects in advance can make the transition smoother and ensure that the child’s needs are met without disruption.
The expert said, “There are two elements to consider. One is creating financial assets for the child’s well-being, and the other is making non-financial provisions to ensure guardianship if the parents are no longer around.”
He added, “You can create a trust, draft a will, or at least prepare a guardianship letter that assigns responsibility to someone you trust.”
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Balancing emotional and financial needs
Apart from financial planning, Roongta underlined the importance of addressing emotional and caregiving challenges. While parents naturally take care of their child’s needs, long-term planning must account for situations where they may not be present.
This includes deciding where the child will live, who will provide care, and how day-to-day expenses and medical needs will be managed. These decisions, he said, are just as important as building a financial corpus.
He emphasised that while creating a corpus is essential, equal attention must be given to who will oversee caregiving and manage responsibilities in the future.
Why expert guidance is essential
Given the complexity involved, Roongta advised seeking help from a qualified financial planner. He suggested that parents should not focus solely on investing Rs 10,000 per month but instead create a comprehensive plan that covers both financial and non-financial aspects.
He also recommended choosing advisors based on trust and references, either through friends and family or through communities facing similar situations. Learning from other parents of specially-abled children can provide practical insights into managing finances and caregiving arrangements.
Avoid rushing into fund selection
Interestingly, Roongta refrained from recommending specific mutual fund schemes. He explained that without understanding the full financial picture—including immediate, medium-term, and long-term needs—selecting funds may not be effective.
He cautioned that even if a substantial corpus is built over time, it may not serve its purpose unless there is clarity on how it will be used and managed.
“I am refraining from suggesting specific schemes because the challenges here go beyond financial products. These issues cannot be resolved simply by naming funds or building a corpus,” he said.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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