When you die without a will, the law of your state of residence determines how your assets will pass. An administrator is appointed and that person carries out the business of collecting your assets and distributing them to your next of kin - as the state law generally prescribes. So there is a "default setting" even if you don't have a will, but it's much easier for all those involved in this process if you have an estate planning attorney draw up a will outlining your wishes concerning how your assets pass at your death.
A will is often times the initial component of the overall estate planning process. Even if you don't fully understand everything that goes into estate planning, a will is a good place to start. Without a will, the law of your state of residence steps in determine how your assets will pass.
This spells out your wishes concerning how your assets will pass at your death. It does not affect all assets. For example, it has no effect on:
A living will spells out your end of life decisions. This is the document which tells the doctor when you want the plug pulled or that you want maximum pain relief if you are at that point.