Everybody should have a power of attorney, but not everybody knows exactly what it is or why it's so important.

A power of attorney is a legal document that empowers a person you trust to handle your financial affairs if and when you become incapacitated. While you're up and around, the document just sits in a file. But if you're in an accident and suddenly can't act on your own behalf, the document allows somebody else to make decisions on your behalf—usually temporarily, until you can start handling your own affairs again. At that point, the document goes back in the file, and you're back in charge.