A power of attorney is an authorization for one person to transact business on behalf of another. It can be specific as to one instance, or it can include any conceivable business transaction. Power of attorney documents were once considered void if the maker became mentally incompetent. Most states have now adopted the Uniform Durable Power of Attorney Act which provides that a power of attorney will survive even though its maker has become mentally incompetent.
While a power of attorney is a simple document to draft, it has inherent pitfalls. Power of attorney can be a useful safeguard against potential unknown future incapacity, but it empowers someone else to handle the financial affairs of an incapacitated person. As a result, it may give rise to family disputes and even emergency court filings in a time of family crisis. And, unlike a court appointed guardian or conservator, there is no one charged with overseeing the action of the individual with the power of attorney.