A power of attorney is an instrument which can give either limited or broad authority to a person (the attorney) to deal with the legal affairs of another person or entity (the principal).
Authority may include to operate the principal’s bank accounts, buy or sell the principal’s real estate or shares, or to enter into any agreement on behalf of the principal.
It does not include making life style decisions for the principal including medical, care, financial and housing decisions (see Guardianship). The power of attorney cannot be used after the principal has died but, under certain conditions, can still operate when the principal has lost legal capacity such as has become ill or of unsound mind or the power is irrevocable.
If you believe that you are likely to become incapacitated, you should consider appointing a power of attorney for them to conduct your affairs.
Also, it is common for couples to give powers of attorney to their spouses when they know that they will not be available to sign important documents, mostly because they will be in hospital at the time of the transaction or overseas.
Powers of attorney can also be given by companies to non-directors or non-executives, by parents to children vice versa, brother to sister vice versa, etc.