Leading Your Client With Special Needs Children To Set Up A Trust

Every child is special, but a child with special needs requires more attention. If your clients have a child with special needs, extra care is required when you discuss their estate plans.

*source: https://www.outpourtunities.org/

Clients with special needs child often face the following estate planning challenges:

  • Will the assets be readily accessible to the special needs child in the event the parents are incapacitated?
  • How to ensure that the inheritance will be used for the child’s needs?
  • How to ensure that the Trustee do not misuse the child’s entitlement?

Below are some key areas to a comprehensive planning for your clients.

Step 1 - Write a Will & Set up Testamentary Trust
Key points to note:

• Appointment of Guardian/Caretaker

A guardian must be appointed in the Will as a caretaker to look after the special needs child.

Provide allowance for the Guardian/Caretaker

As guardians and caretakers for a special needs child require more dedication, patience and resilience, you should recommend to your client to provide allowance that is appropriate with the amount of effort required to care for the special needs child.

Preparation for the Guardian/Caretaker

A letter containing a list of daily routines and personal preferences of the child can be written as a guideline to the Guardian to carry out his responsibilities. This letter can be placed in a sealed envelope and attached together with the Will.


*You may also remind your clients to register the child as a Person with Disability (OKU) at the nearest District Social Welfare Office. Further information on welfare for special needs person can be found on http://www.jkm.gov.my/

But…is a Will all they need?

Probate takes 3-6 months to be obtained, it is even longer before assets can be distributed to the beneficiaries in the Will. So, the immediate needs of the child will not be met through the Will.

In addition, the Will only takes effect upon death. What if your client is incapacitated or goes missing!


Advise your clients to set up a Private Trust for quick distribution to bypass the Probate and to provide for the special needs child in the events other than death.

• What Assets to set up for the Trust?

A special needs child may require more funds than normal children because of special education, additional care for his/her daily needs and possibly medical attention or medicine or bespoke medical equipment such as prosthesis.


Thus, it is crucial to ensure that there is enough funding to meet the child’s needs for his lifetime. You may suggest to your client to use life insurance policy to supplement his trust funding.

• How and When to distribute?
Critical needs such as medical, living and education needs must be provided. Clear and specific instructions would be helpful in meeting the needs of the special needs child. This can also help client address his/her child’s need precisely and plan his funding more completely.

*tips: list of care centres/special needs institutions can be found on http://www.jkm.gov.my/

• Trust Period
The trust should provide for a trust term that lasts for as long as the child lives. Otherwise, your client could discuss the child’s life expectancy with the attending doctor.

• End of Trust Beneficiaries
Consider how the remaining balance of the trust fund after the demise of the special needs child is to be distributed, for example, to other surviving siblings or donated to a charity your client prefers.

Clients’ Frequently Asked Questions

Question: Can I appoint my wife as the Trustee?
Answer: No, Rockwills Trustee Berhad must be the appointed Trustee for any Private Trust such as Declaration of Trust and Insurance Trust.

Question: Why should I not appoint an individual trustee?
Answer: It is not advisable to appoint an individual trustee due to the following concerns:

  • Individual trustee may become sick, senile, or incapacitated
  • He may not survive the beneficiary
  • He may be dishonest and misuse the trust fund
  • He may be careless on the financial management. For example, using the trust money to invest in a high-risk investment and end up losing the capital that supposed to take care of the child’s needs for the rest of his life etc
  • He may migrate or lose interest in handling or delegates his role to someone else who may or may not be reliable

In contrast, Rockwills being a licensed Trust Company, is professionally run, free from bias, anxious to protect its reputation and will not die or fall sick.

You can spell out in the trust deed the type of investments or even the specific investment or investments the Trustee is allowed to invest. By doing so, you can sleep easy knowing the trustee company will carry out the instructions so that your special needs child is not abandoned.

Question: Since my child would not understand his rights in the trust, how can I ensure Rockwills will carry out its task professionally?
Answer: When planning your Trust with us, a Protector of your choice should be appointed. He acts as an enforcer who reserves the right to bring an action against Rockwills if the trust instructions are not carried out the way it is instructed. He also acts as an advisor to the trustee when difficult decisions need to be made.

Question: Under the Trust, will Rockwills be responsible for taking care of the child?
Answer: Not for taking care of the child because the Trustee does not have such capability.

However, Rockwills is responsible for following your instructions in the trust. You can instruct Rockwills on how you want your child to be taken care of, at which type of institution, even down to specific caretaking institutions such as food.

*source: https://www.fidelity.com/viewpoints/wealth-management/estate-planning-for-special-needs


While all estate planning is significant, it takes on greater importance when your clients have a child with special needs. It could be challenging for them so help your clients to have a plan affording them a peace of mind when something happens!