Setting Up a Power of Attorney

You may choose anyone you wish to make decisions on your behalf when you are unable to.

Yes. You can select anyone who you trust to be your POA.

I strongly recommend sitting down with the person and your lawyer to draw up an agreement that everyone understands and agrees to. If your state is like mine, the document will need to be signed by all parties to be valid.

POA paperwork will be required by banks, utilities etc. when the person is acting on your behalf so a verbal agreement is essentially useless. These institutes need written, signed, and dated documents (and every state is different as to exactly what this all entails so be sure if you are in different states that you follow your state's requirements).

This is critical stuff so do it right the first time! This is one time where saving money and going DIY is foolish

Also depending on where you are there are a variety of types of POA...like the durable, general, medical, and something called springing (which I personally would avoid, but that is just me).

Be sure to work with the lawyer to set up everything you need for the process to work as YOU intend it to.

Blessings!

Pghgirl makes very good points; this is a very serious undertaking and can cause a lot of misunderstandings, as well as serious consequences.
Please - make an appointment with an attorney and have your sister present so when you explain what you want her to handle, the attorney can guide you and her so she does not have more authority than you wish anyone to have.

A POA can always be changed or revoked but problems can arise if you do not have the original POA returned to you.

POA rights/document ceases on a person's death so do not think giving your sister a POA will take care of after death problems.
A POA is not anything like a will as a POA is only a piece of paper when the person dies.

Be sure to talk with the attorney about this ((unless you already have will).

You can give any person in the world that you feel is there to protect you and look out for your best interest POA. The only thing that needs to be done is a lawyer should set up this agreement and the person you choose needs to be there to sign it and understand what they need to do for you. They need to understand the scope of their duties and be able to fulfill them when you take sick.