A Power of Attorney (POA) is a document in which one person, the "principal" gives authority to his "attorney-in-fact" (who need not be a lawyer) to act on his/her behalf. The scope of the power can be very limited - e.g., the purchase of a single real estate investment - or almost unlimited. Additionally, the POA can have a specific termination date, or essentially remain open-ended with no specified end date.

There are two primary situations in which POAs are used:

• First, they can make business or financial transactions much easier, simply by allowing a busy or absentee party to send somebody to act in his/her place. For this purpose, a very extensive POA might be used, reciting a laundry list of specific powers pertaining to every conceivable business transaction.
• Secondly, and more important for estate planning, POAs can allow an individual to delegate broad authority over personal financial affairs even - and especially - in case he/she becomes disabled or incompetent. For this, a Durable POA is necessary. It is a very broad and detailed document that also states: "This POA shall not be affected by my subsequent disability or incapacity, or by the passage of time.” This sentence is what makes it “durable”. Without that sentence, state law might render the POA inoperative immediately upon the disability of the principal - precisely when it is needed most.
  
  Assuming one has a trusted attorney-in-fact, the Durable POA can easily and inexpensively provide the peace of mind sought by many people contemplating disability.

Although blank POA forms are readily available, this is a document best prepared by a qualified attorney. The trouble with any POA is that it is presented to banks and other third parties who can arbitrarily decline to recognize it for their own reasons. It is important to recognize that the party being asked to accept your POA is doing so as an accommodation; they are not legally required to accept it. That is why it is important that your POA be meticulously and professionally prepared. If the third party finds any reason whatsoever to fear "a potential problem" for honoring the document (i.e., vague, incomplete or improperly prepared) it might be rejected.

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