The Durable Power of Attorney ("DPOA") grants power to another person to perform business transactions for you if you cannot do it yourself. It is called "durable" because POAs terminate if you become incompetent or incapacitated unless you make it "durable", in which case the power endures while you are incapacitated, until you recover from the disability or die. At your death, your powers of attorney are extinguished and your will dictates your wishes and you are represented by your executor or executrix. If you become disabled and do not have a DPOA, a court may have to appoint a guardian to act for you. This process is expensive and requires on-going accounting to the court by your guardian.
The DPOA can be made effective immediately or only upon you becoming disabled (mentally or physically). This is your decision to make - whether the DPOA should become effective immediately or upon disability. In making this very important decision, there are two offsetting considerations. If you make the DPOA effective immediately, then your attorney-in-fact can thereafter perform the transactions you give them authority to perform in the DPOA, which is almost any transaction. Thus you must have very high trust in your attorney-in-fact. If you make the power effective immediately, you can file the DPOA with the Register of Deeds, which allows your attorney-in-fact to undertake real estate transaction on your behalf, including buying and selling your real property. However, if you make the DPOA effective upon disability you can have the issue of whether you are in fact disabled. If there is any dispute about your disability, then your attorney-in-fact may not be able to act for you.