A letter of direction has many common uses and is very similar to a letter of assignment. The main premise of the letter of direction is handing over specific rights and privileges to another person in written form. For example, letters of direction are very common when someone passes away, and the executor requires documentation to prove they are in control of the deceased’s estate. Other examples include giving a financial broker power of attorney over an investment account, or assigning the rights of one party to another in a business relationship.
Sample letter of direction
Ralph L. Greenwood
1785 Franklin Avenue
Corpus Christi, TX 78412
Dear Ralph,
I hereby transfer the right of power to trade over trading account #456343 at Prudential Financial to James Cricker, beginning on December 4th, 2009 and commencing December 4th, 2010.
With this agreement, James Cricker is permitted to trade up to $100,000 of the contents of account #456343 on the open market. He is not permitted to make any drawings, or take any management fees until he turns a profit of at least 5% on the whole amount.
If James Cricker violates these terms, he will be subject to the penalties negotiated in contract #456454, his personal services contract.
Sincerely,
Bill Ranfrick
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