For instance, a power of attorney may be granted to sign a business deal with Conglomerate X but will not be effective when signing deals with Conglomerate Y even if they are signed on the same day. It all depends on the legal papers that accompany the power of attorney. And these papers stating the contract for the power of attorney is required to be shown before an agent can act. Legal requirements A person must meet certain requirements according to the laws in your state. One of the requirements in most states is that an agent should be of sound mind to be able to make the right decisions when it comes to the finances, properties, or health of his or her principal. Creating a power of attorney gives you an assurance that nothing will go wrong with your assets and finances and that your wishes will be carried out just as you planned. Include all your assets and liabilities in your document. Make sure that your power-of-attorney form properly documents all the necessary information that can guide your agent in making the right legal decisions for you. 6. Talk to a lawyer. It is recommended that you consult a lawyer to avoid conflicts or hassles in the future. On the downside Remember that in giving a power of attorney to someone, you are basically telling people who read the document or the contract that you are giving the agent full rights to sign for you and agree or refuse something on your behalf. If the agent turns out to be corrupt, then any transactions that he or she handles is at risk for fraud. It is especially useful for people who are suffering from a debilitating health condition such as Alzheimer s disease or are going to stay in a nursing home. Right after you and your agent have signed the documents, the durable powers of attorney take effect until they are revoked by the principal. The document is terminated at the death of the principal. A POA suits people who want to have the peace of mind knowing that someone they trust will act on their behalf regarding financial or health care matters when they are no longer able to do so. It is impossible to underestimate the importance of POA. This legal document comes in handy when you incur an injury or develop a life-threatening disease, both of which render you incapable of making decisions on your own.