A durable power of attorney for finances is a document that gives another person the ability to make financial decisions for you if you become incapacitated and can't do so for yourself. That person can access your accounts and sign your checks if necessary. Many planners will include a durable power of attorney in a basic estate planning package.

This document is worth having. What if one of your relatives were to fall ill. Their financial life could begin to unravel; bills go unpaid, and creditors start calling. Without a power of attorney, you (or someone else in the family) would have to go to court and ask to be named his legal guardian. You'd have to report to the court frequently, filing documents on how assets are performing and how much money is being spent. People who've been through this process say it's a nightmare. Having power of attorney is the way to avoid it.

The real question is to whom should you give this important power? Most people give it to a spouse or an adult child, a sibling or a trusted friend. It should be someone who is comfortable enough with his or her own finances to be able to handle yours. If you have no family members or friends whom you trust to make sound financial decisions, you can give power of attorney to your longtime accountant or attorney.