A financial power of attorney is a written legal document that allows you to give authority to another person to make financial and legal decisions (and financial transactions) on your behalf.

Sometimes, making your own financial decision is not possible. You might be traveling in remote areas for extended periods of time, or an illness or injury has incapacitated you. In these instances, having a designated person that your trust to make decisions for you and act on your behalf can be critical.

A financial power of attorney can be limited or general. Limited financial powers might mean your chosen person can read your mail, pay bills and sign checks on your behalf. It can also be arranged so that your designated person can conclude a single transaction for you — like a real estate deal. A general financial power of attorney gives your designee broad powers to act in any financial capacity on your behalf.

Make the selection of your attorney-in-fact (your chosen person) very carefully. Because this position is not overseen by the courts, they can be in a position to do you great harm.