In many situations, the health care power of attorney is different from the agent who would oversee financial and business matters. The attorney-in-fact who is given the durable power of attorney is required to make decisions related to the principal s health like stopping life support or performing surgery. You may not know it now, but it could be what you need today. To begin with, the power of attorney is a legally effective document that states your agreement to give somebody else (a relative, a friend, or an employee) an authority to make special decisions or to do several things on your behalf. It is recognized in common law and civil law systems. Why Do You Need to Prepare a Power of Attorney? A power of attorney (POA) is a very essential legal document. However, before you can fully understand its importance, it is best to know its purpose first. In general, the goal for creating a POA is to protect your interests and manage your estates when you have reached a point when you can no longer do them on your own. However, you need to be very careful when choosing an agent for your power of attorney. The agent you would designate for your power of attorney would assume specific responsibilities and duties. Most importantly, the person should always act for your best interest. By this, it means that the agent you are appointing should always intend to follow your instructions. The agent will decide, for example, where your money and investments will go as well as the kind of nursing home where you will stay. Simply put, your attorney-in-fact will be in charge of everything that concerns your life as soon as you become mentally incapacitated. That being said, you must make sure that you appoint someone who is worthy of your trust. You can ask the lawyer about the form of authority that suits your needs best as a principal. 4. The parties that will receive the power-of-attorney documents Your power of attorney must be put in writing, signed by all parties involved (including the witnesses), and duly notarized. If the terms in the POA are related to taxes, it must be filed at the state government.