Father in law just beginning stage of dementia. What paperwork do we need to do?

My husband and I have been talking about getting a POA for my fil, this morning the doctor called and said he thought he had the dementia. He has been very confused and I told my husband and sil something wasn't right. They thought it was due to swelling and dialysis, which he has just started. He has congested heart failure, kidney failure copd and numerous other things wrong. Since March 3d, he has been in and out of the hospital. Three sometimes he has been out only one day, then rushed right back in. At times he seems fine, but then, you know something is wrong. He has asked nurses if they are working on his truck, things they are trying to hurt him, thinks PT staff are hanging him out the window etc.. Doctor said some of that is due to health, and delirium from being in the hospital in and out so much, but says he thinks he has dementia too. There were other signs too, prior to all this hospitalization. But, I know somebody needs to get some type of paperwork done. Just not sure what type, and with his state what type and when. POA would have been ok, but not sure if that is the way to go now. He can still carry on a conversation with you, knows who you are. Just has these moments, especially at "sundown" Any help would be welcomed. thanks.