Broadly speaking a letter of direction (letter of instruction)1 is any letter that gives instruction and guidance to a recipient. Letters of direction are also common in situations when somebody has passed away, and the executor requires documentation to prove they are in control of the deceased’s estate.
If you’ve ever been the executor of someone’s estate, you know that the role is a difficult one. Mourning the death of a loved one is painful in and of itself. Add to it the responsibility of sorting out what they’ve left behind and you can quickly become overwhelmed.
A number of questions must be answered before the actual legal settlement process can even begin. Where does the deceased keep all of their documents? Where are all of their assets? Do they have property somewhere that you don’t know about?
Resolving these issues can be very tedious and frustrating if the answers aren’t readily available. While you can’t control how other people organize their affairs, you CAN spare whomever you designate this frustration by offering a clear plan to follow in the event of your death.
Some statements that might be included in a Letter of Direction are as follows:
As my Executor(s) I authorize you to purchase, at the expense of my estate:
Professional services as you deem fit and appropriate in the care of my estate. The intent of this direction is to ensure that my Executor(s) charged with administering my estate have the benefit of professional resources where required to manage investments, property, and business interests, and to provide legal, accounting and tax advice, ultimately for the benefit of the beneficiaries; AND
An Executor Liability Insurance policy for Executor (s) and estate risk protection. The intent of this direction is to ensure that my Executor(s) charged with administering my estate are protected by insurance.
It is always advisable to obtain proper legal advice when creating a Letter of Direction in order to ensure that the document contains clear instructions for anyone responsible for managing the affairs of a deceased person.
Mutual funds and segregated funds provided by the fund companies are offered through Worldsource Financial Management Inc., sponsoring mutual fund dealer. All other products and related services are offered through Brian Fitzsimons/Fitzsimons Financial.