He's placing a lot of trust in you if he wants to give you power of attorney. He also wants peace of mind when he goes into treatment that things will be taken care of during his absence. It also depends on what kind of relationship you have with your nephew and if there would be a lot of drama involved once he hands over his finances to you.
If you haven't already, I would talk with him further about this - so you can gauge the ground. Then I would find out what bank he has. You can go talk to one of the folks there about this situation. Some banks have someone that can do this on behalf of their customers so it's worth checking on this angle should you decide you don't want to do it.