Powers of Attorney give another person the power to act in place of the principal (the person signing and authorizing the power of attorney). The power of attorney can be drafted so that it would only become effective upon the disability or incapacity of the principal, or so that it is effective immediately. However, powers of attorney which only become effective upon incapacity may create issues in determining when incapacity occurs.
The power of attorney allows someone else to handle affairs such as payment of bills, cashing checks, and selling assets. A specific power of attorney may be drafted which grants only very specific, limited powers to the person named as agent (the person given power to act for the principal). This could include the power to manage a particular piece of real estate, or a particular account, investment, or business.
Powers of attorney terminate upon the disability or incapacity of the principal unless the power of attorney is durable, specifically stating that it will remain effective after the disability or incapacity of the principal. Powers of attorney terminate upon death, so are not effective to manage or transfer assets after the principal’s death.