Important Considerations When Creating a Financial Power of Attorney What are the ways to put your finances in order when time comes you are unable to do so? Setting up a power of attorney (POA) is one of your options when it comes to managing your daily financial affairs and transactions under certain circumstances such as when you are undergoing medical treatment or out of the country. In case you become physically or mentally incapacitated, how could you possibly pay your bills and mortgages or conduct transactions at the bank? Imagine your home getting foreclosed because you are physically unable to pay off your home loan while you were undergoing medical treatment in a hospital. 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. The person or organization that receives authority is called the agent or the attorney-in-fact. The durable power of attorney is called such, since the attorney-in-fact would continue to have authority and act on behalf of the principal, even if the principal becomes incapacitated. Though the durable power of attorney has such characteristic, it is still important for the document to state that it would remain valid even if the principal becomes incapacitated or disabled. They are also called agents because they also serve as liaison officers and go-between or more formally, attorney-in-fact because they are only licensed by a common person. Because it can have legal consequences, the transfer of power or the authorizing is written as a legal contract, which is shown to people before the attorney-in-fact can proceed with his dealings on behalf of the client or the principal. This means that the person who you have given the power of attorney to, which is called the agent or the attorney in fact, will have the right to sign legal documents in your name and even have access to your bank accounts, among other things. Thus, it is important to look into the validity of these powers of attorney and the circumstances when they can become invalid.