Preparing power-of-attorney documents is not as complex as it seems. Listed here are seven easy steps to help you come up with a proper power-of-attorney document. 1. Gather all the forms you will use as models for your document. Over the Internet, you can find websites that specialize in legal forms. The appointment and authorization should be clearly stated in the legal document (a power of attorney is actually a legally effective document). How is the power of attorney created? You need to completely fill out a specific power of attorney form. It should state yourself as the principal and identify the agent you are appointing to take authority on your affairs if you become unable to do so. It is defined as the full legal authority given to another individual to be responsible for all your finance-related affairs, including filing income tax returns and paying the bills. The agent can even sign documents on behalf of the principal. This agent is allowed to handle all the principal s finances except the assets owned by the revocable living trust. This is very sensitive because the grantee will have the power to allow or disallow health care and will even be able to decide if hospitals will pull the plug in case the principal falls into a coma. There is also what they call the Psychiatric Advance Directives, which gives the grantee the right to decide for the care and treatment of someone who is mentally ill. It would help to have a video document stating with the principal stating the power of attorney or have several witnesses present to testify that the principal is mentally and psychologically competent when the document was signed. The power of attorney s termination is stated in the document. In addition to that, it could also end upon the death of the principal or when the principal, given that h/she is still competent, decided to destroy the document. The effectivity of this document ends when the principal dies or becomes mentally disabled. Because of its seemingly unlimited nature, the general power must be considered thoroughly before it is given to another person. It is advised that this type of power be used sparingly because it is prone to abuse and misuse of power by the agent.