Which document may dictate how debts are handled after someone dies?

The Last Will and Testament is the key document that provides instructions on how a deceased person's estate should be managed, including the handling of debts. This legal document outlines the distribution of assets and specifies how liabilities, such as debts and final expenses, should be paid. It allows the testator to appoint an executor responsible for settling any outstanding debts and ensuring that the estate is distributed according to their wishes.

In contrast, a Living Will primarily focuses on medical decisions and end-of-life care, rather than financial matters. A Durable Power of Attorney grants someone the authority to act on behalf of another person in financial or legal matters while they are still alive, but it does not govern the situation after death. A Healthcare Proxy designates someone to make medical decisions for an individual who is unable to do so, and it also does not address issues surrounding debts after death. Each of these other documents serves distinctly different purposes and does not govern the distribution of debts in the context of a deceased individual’s estate.