What is the difference between a PoA and a Will?

We often hear the terms – Power of Attorney (PoA) and Will when dealing with property matters. A PoA and a Will are both legal documents that allow an individual to dictate how their assets and property-related matters are to be managed. Yet, these two documents are distinct in their purposes and used in completely different contexts. A Will, as many people know, is a document that states an individual’s wishes to transfer their assets after their death. A PoA is different. It authorises a person to manage the owner’s assets while that person is still alive. Those looking to own a property, including homebuyers, NRIs and senior citizens, need to be clear about the difference between a PoA and a Will. Knowing how these documents work can help avoid confusion, fraud, and future legal disputes.

What is a power of attorney for property?

In the real estate context, a Power of Attorney (PoA) is a legal instrument that authorises one person to act on behalf of another to manage their property, finances and related matters. The person who grants the authority is referred to as the ‘principal,’ and the one who receives it is the ‘agent’ or ‘attorney.’ The agent has the right to perform tasks such as signing property documents, handling property registration and collecting rent. 

For handling property matters, there are two types of PoAs that people often use:

• General Power of Attorney (GPA): With this PoA, the agents get broad powers to manage multiple tasks related to property, renting, banking or legal matters. Typically, people provide such authority only to trustworthy people they know. 
• Special Power of Attorney (SPA): This type of PoA provides limited authority to the agent and allows them to do only a specific task or transaction, such as signing or registering a lease deed/ sale deed in the absence of the principal. After the specified task is completed, the SPA generally loses its validity.

What is a Will?

A Will is a legal document that an individual can create, stating how they want their assets to be managed or distributed among legal heirs after their death. It is considered a valid method of succession. The person who has written the Will is known as the testator and the people receiving the assets are known as beneficiaries. Generally, there is another person known as the executor, who is authorised to carry out the instructions given in the Will.

Difference between PoA and Will

Can property ownership be transferred through PoA?

After a Supreme Court ruling, property transfers cannot be done only by using a General Power of Attorney (GPA). If done so, they will not be considered as a legally valid transaction. A Power of Attorney should only be used to authorise someone to manage, sell, lease or handle property matters. If a person wants to transfer property ownership to another person, it should be done through a registered sale deed, or other means like a gift deed, a relinquishment deed or a Will. Homebuyers must be cautious about property transactions based on PoAs. Such transactions can bring risks of ownership disputes, issues in home loan approvals or resale in the future.

When should you use a PoA?

A Power of Attorney is a useful legal tool for non-resident Indians (NRIs) who own properties in India and want to undertake some property transactions. For someone who is either travelling abroad or staying overseas, it is not possible to frequently visit the country to handle property matters. For those people, authorising another trusted person through a POA to handle such matters becomes an easier option. If an NRI wants to sell a property, sign a rent agreement or manage their rental properties, they can do so through a GPA or an SPA. Similarly, in certain situations where a property owner cannot visit the sub-registrar’s office, due to old age or other reasons, a PoA can be very beneficial. It has to be noted that PoA itself is not being used for property ownership transfer but only for handling property-related formalities. For the actual ownership transfer, a registered sale deed is required.

When should you use a Will?

If a person has many assets like a house, jewellery or other property, then making a Will will help in planning for the future and safeguard their family’s interest. The person can write a will stating how the property distribution should be done among their legal heirs after their demise. A Will will provide clarity on property inheritance and minimise the chances of disputes.

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