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In general, a person with dementia can sign a power of attorney designation if they have the capacity to understand what the document is, what it does, and what they are approving. Most seniors living with early stage dementia are able to make this designation.
Typically, as long as dementia is minor or nonexistent, a person in the beginning stages of a dementia-causing disorder will be deemed mentally competent in the eyes of the law.
A Power of Attorney gives someone else the legal power to make decisions on behalf of someone who is no longer able. If you are concerned about a relative reaching this point, then first of all they need to be diagnosed with Dementia by a Doctor.
One must mention the following details on the Power of Attorney format PDF:The name of the principal.The name of the agent.Signature.Details and legal authorities provided to the agent.Other details depending on the Power of Attorney format for authorized signatories.