A will is a legal document which directs how a person's property should be distributed after his/her death. Within this document you designate your Executor (the person who will handle your assets and ultimately make distributions per your instructions), and your beneficiaries (the person or entities which will receive gifts from your estate).
You must be 18 years of age and of "sound mind" to create a valid will. You must know what a will is, what it does and that you are making one. You must understand the relationship between you and those who you would normally provide for in your will, such as your spouse or your children (this does not mean you must provide for these individuals). You must also be able to understand the kind and quantity of property you own and how you wish to distribute it.