A Power of Attorney (POA) gives someone of your choice (your Attorney) the authority to take actions or make decisions on your behalf if you should suddenly be unable to do so for yourself.
A Power of Attorney ensures that your financial affairs and personal welfare can still be dealt with/protected in the event that you lose the capacity to do so.
If you lose capacity, it means that you are no longer able to look after your own financial and personal affairs. Losing capacity can include being:
Unless you have a Power of Attorney arranged, nobody automatically has the right to make decisions for you unless you have granted them Power of Attorney in advance. If no one is legally appointed by you to act, then no one has legal authority to do so. This means that, although your nearest relatives may be consulted about your wishes, they cannot decide what should happen to you if you haven't given powers in advance.
If you have not granted powers in advance, and you lose the capacity to make your own decisions, then the courts have to appoint someone to be your Guardian. There are processes by which family members can apply to be granted these powers after someone has lost capacity, but this is a long and expensive process which requires a court hearing.