How to create a financial plan for a family which has a special child?

(1) Special contingency planning (this is over and above the regular contingency plan):

Contingency goal for a special child should include the following: 

Funds needed for meeting the expense of yearly therapies and funds needed for meeting the yearly school fees etc.

(2) Retirement Plan: 

Client should plan for their own retirement years like any other client. But while doing so they should quote separately their (a) current monthly household & lifestyle expenses and (b) current monthly expenses towards special child's therapy, school fees and other related expenses. 

Why to quote these expenses seperately? Because both these expense heads may have seperate inflation rate to be assumed for.

(3) Create a Private Trust: 

This is because when the beneficiary (in this case a special child) is not capable of managing the assets by himself or herself, then you need to create a Private Trust and appoint trustees who will manage the assets on behalf of the child (beneficiary).

The objective behind creating the trust - i.e. what is to be done with the assets which are transferred to the trust - should be very clearly mentioned in the trust deed and get that deed registered. If you want you can also appoint some professionals as trustee who have the expertise and experience of managing finance for special children. Make sure that your life insurance proceeds also go to the trust directly and not to the beneficiary.

What is to be done after your death with your other assets (which are not yet transferred to the trust as those are meant for your current or future use)? 

Create a Will and ensure that such assets will also go to the trust after your death and not directly passed on to the child. 

In Will you can also specify a "guardian" who will take care of your child in your absense. A guardian is supposed to take care of your child's day to day needs while a trustee is supposed to manage the finance for your child. Both trustee and guardian can be the same person or different persons.

(4) Make use of tax deductions:

There are certain tax related benefits for families who have special child as dependents. Check deduction U/S 80DD for medical treatment of disabled dependent (up to 1.25 lakh is allowed for severe disabilities and 75 k for non-severe disabilities.)

(5) Frequent reviews:

As this is not a regular financial plan frequent reviews (preferably a review every quarter) is recommended. Why? Because short term goals are very important here and are also subject to change any time.