Aside from issues about the agent s trustworthiness, another common problem with the power of attorney is that the authority is too broad. When the principal uses the general power of attorney, the agent would find himself handling real estate, securities and large financial transactions. To avoid this problem, the power of attorney should be specific enough. 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 refers to a legal document that allows an individual or a financial institution such as a bank to manage your finances whether you are capable or not of doing it on your own. The following are the essential considerations that you need to think about when creating a financial power-of-attorney document: 1. As the name suggests, health care durable powers of attorney authorize a person, who is called an agent or an attorney-in-fact, to make all the needed choices regarding health care and hospitalization on behalf of the principal. The decisions can be made by the agent once the principal is no longer able to do it for himself or herself. In case you suddenly get mentally incapacitated while any of the three kinds of power of attorney is in effect, the durability provision of the document would allow the agent to stay as your attorney-in-fact indefinitely. In the durable power of attorney, you are acknowledging the possibility that you could become mentally or totally incompetent because of any accident or illness. A principal must of course be of a good mental state when giving the power of attorney. Principals who are physically injured, sick or mentally unhealthy are deemed incapable of giving power of attorneys. When power of attorneys are given under these circumstances, all the legal documents the agent signs or agrees to will not be honored in court and will be deemed ineffective.