A power of attorney is a legal document which allows a person to appoint another person to handle their business affairs while that person is unavailable or unable. A power of attorney allows another person to act in such affairs as signing papers, checks, title documents, contracts, handling bank accounts and other activities in the name of the person granting the power.

The person granting the power of attorney is known as the "principal"  and the person appointed is referred to as an "Attorney-in-Fact" or "Agent."  To have a valid power of attorney the Principal must be mentally competent at the time it was signed. In other words the Principal must understand the powers that he/she is granting to the Agent and the implications of having someone else make decisions for you. If there is any question about whether the principal is mentally competent then the parties should opt for a Guardianship or a Conservatorship.

TYPES OF POWER OF ATTORNEYS:      General Power of Attorney, Special Power of Attorney are the two basic types of power of attorneys. A general power of attorney, authorize the agent which covers all business activities. In contrasted, the special power of attorney grants powers to the agent which is limited to specific matters, such as selling a particular piece of real estate, handling some bank accounts or executing an agreement.

A power of attorney may expire on a date stated in the document or upon written cancellation.  Also, "Durable" Power of Attorney provides that the that the Power of Attorney will remain in effect or will take effect if the principle become mentally incompetent.  If the princple die the the Power of Attorney will expire at the death of the princple.

Every state has different law governing power of attorneys but as a general rule the princple has to sign the power of attorney before a notary public acknowledging he/she executed the power.  Notarization makes it harder for someone to challenge the validity of the signature. Also, notarization allows the document to be "recorded" for use with real estate transactions.

POWER OF ATTORNEY VS. CONSERVATORSHIP:    The main difference between a Power of Attorney and conservatorship is court involvement. In a conservatorships the court appoints the person who acts on behalf of the other. And, once a conservatorship is created the conservatee can no longer act on his or her own behalf.