Lyn, I'm not certain about the laws in Germany, however, a Power of Attorney will not go far with your niece living with you permanently. I used to work for the Department of Juvenile Justice before moving to Yokota, Japan, and the law required that you obtain custody for the minor child to reside with you. It would be in your best interest to obtain custody if she's going to be with you on a permanent basis. The custody papers will allow you to register her in school, obtain medical records, and take care of any needs that may occur while she's with you without having to consult with your parents regarding her well being. She will legally be your daughter. Once again, I'm not certain about the laws in Germany so you may want to consult with someone in the legal field. Good luck and God Bless.
Yokota, Japan