Incompetence & Losing Capacity:
Answers to 8 FAQs

Have you ever been concerned about an older relative who seems to be making bad decisions?

Perhaps your elderly father insists he has no difficulties driving, even though he’s gotten into some fender benders and you find yourself a bit uncomfortable when you ride in the car with him.

Or you’ve worried about your aging aunt giving an alarming amount of money to people who call her on the phone.

Or maybe it’s your older spouse, who has started refusing to take his medication, claiming that it’s poisoned because the neighbor is out to get him.

These situations are certainly concerning, and they often prompt families to ask me if they should be worried about an older adult becoming “incompetent.”

In response, I usually answer that we need to do at least two things:

• We should assess whether the person has “capacity” to make the decision in question.
• If there are signs concerning for memory or thinking problems, we should evaluate to determine what might be causing them.

If you’ve been concerned about an older person’s mental wellbeing or ability to make decisions, understanding what clinicians — and lawyers — mean by capacity is hugely important.

In fact, the American Bar Association’s Ten Legal Tips for Caregivers lists “Understand Decisional Capacity” as tip #1. But so far, I’ve found very little information available online, to help older adults and families understand this important issue.

So in this article, I’ll answer some of the frequently asked questions that come up around this topic:

1. What does the term “capacity” mean when it comes to decision-making?
2. What is the difference between incapacity and incompetence?
3. How is capacity determined?
4. How do Alzheimer’s disease and other forms of dementia affect capacity?
5. Does capacity have to be determined by legal professionals? Is it a “legal decision” whether someone has capacity?
6. Do I have to have a legal or clinical determination of incapacity for a specific decision before I override the decision of an older person with dementia?
7. Do I need a legal or clinical determination of incapacity before I take the car keys away from an older parent who has dementia and is an unsafe driver?
8. Is neuropsychological testing required to assess capacity?

I’ll also share a list of additional resources and references at the end.

What does the term “capacity” mean when it comes to decision-making?

Let’s say you tell me that your 87-year old aunt Mary has been falling repeatedly, but she refuses to go see a doctor.

In this case, we might consider whether she has the capacity to decide whether or not she needs to see the doctor. It’s especially vital to do this if Mary has been showing signs of memory or thinking problems, or if she’s been diagnosed with a dementia such as Alzheimer’s.

When we ask whether a person has the capacity to make a given decision, we are asking whether the person can show us that he or she has the mental abilities necessary to make the decision.

Generally, capacity requires that individuals be able to understand:

• The situation they are in,
• The decision in question,
• The consequences of making a given choice.

The person should also be able to explain his or her reasoning, and express the choice to others. And the reasoning should not rely on anything that strikes most people as bizarre or delusional.

Experts have determined that capacity requires these four decision-making abilities:

• Understanding: Understanding the issue/decision and the available options
• Expressing a choice: Being able to state a decision
• Appreciation: Being able to explain how the information about the situation and available options apply to one’s personal situation
• Reasoning: Being able to compare options and understand the relevant consequences.

Different types of decisions require different types of mental abilities.  Experts consider that these six civil capacities are of particular importance for older adults:

• Medical consent capacity
• Financial capacity
• Testamentary capacity
• Sexual consent capacity
• Capacity to drive
• Capacity to live independently

Legal standards for capacity are determined by state law. The specific requirements can vary, depending on the state and the type of capacity in question.

People sometimes assume that decisional capacity is an “all-or-nothing” type of ability: either you have it, or you don’t. This is sometimes framed as whether a person is “competent” or “incompetent” to manage affairs. (See below for more on capacity and competence.)

But the reality is more complex. Here are two essential points everyone should understand.

1.Capacity is decision-specific.

This means a person’s capacity should be evaluated in light of a specific decision to be made.

Why does this matter? Well, some decisions are complex and require a person to consider and weigh multiple pieces of information. For instance, the decision to sell one’s home, which may involve consideration of tax and estate consequences, is often quite complex.

In comparison, some decisions may be relatively straightforward. For this reason, it is possible for a person to lack capacity to make certain types of decisions while retaining the capacity to make simpler decisions.

2. Capacity can fluctuate, depending on a person’s health circumstances.

For instance, most people immediately after surgery are drowsy. In this state, most will lack the capacity to address anything more than a very simple decision. But, their decisional capacity should improve as the person mentally recovers from the surgery.

It is also common for people with vulnerable brains, such as people with a diagnosis of Alzheimer’s or another dementia, to experience fluctuations in capacity. When they are feeling well and are at their best, their mental abilities might be good enough for them to have capacity for many decisions. But if they are sick, or stressed, or otherwise not thinking at their best, their capacity to make decisions can be reduced, sometimes drastically so.

For these reasons, before concluding that a person lacks capacity for a given decision or task, every effort should be made to improve capacity if at all possible. Such improvements may be possible by treating an underlying health problem, or by mitigating any hearing or vision problems.

I explain a simple device that geriatricians often use to improve hearing here: Age-Related Hearing Loss: What to Know & What to Do.

What is the difference between incapacity and incompetence?

Capacity is often considered from a clinical perspective (i.e. by doctors, psychologists, and others) versus a legal perspective (i.e. by lawyers, judges, and courts).

Historically, the term “competence” was used in legal settings and the term “capacity” was used in clinical settings. The legal determination of competence related to whether a person had the legal right to make their own decisions, and was usually informed by a clinical assessment of capacity.

Hence many clinicians will still say that they cannot assess someone’s “competence;” they can only assess their capacity as regards a given decision or life function.

However, states have recently been moving away from global legal determinations that a person is “incompetent,” — which often meant the loss of virtually all control over one’s affairs — and are increasingly favoring determinations of incapacity for certain types of decisions or life functions.

Hence the old convention of using “competence” for the legal arena and “capacity” for the clinical one no longer works well.

Instead, it is more accurate to refer to “legal capacity” versus “clinical capacity.” These two concepts are distinct – albeit related — as explained further below.

How is capacity determined?

In most situations, we presume that adults have capacity. If concerns about capacity are raised by others, or if a professional notices anything to cause concern about capacity, then a process of further assessing capacity may be started.

Legal professionals are generally required (by state laws and by their professional code of conduct) to conduct a preliminary assessment of a person’s capacity to complete a given legal task. They may be required to take action if they believe a person may not have capacity for the issue at hand.

However, legal professionals are not trained to clinically assess capacity. Such assessments must be done by professionals with some type of healthcare — often psychology — background.

Clinical capacity assessments vary depending on the type of clinician involved and the capacity issues in questions. Generally, they include a more detailed evaluation of the person’s capabilities, and should also include the likely medical causes for any reduction in capacity.

This article describes a very practical framework for assessing capacity for older adults to make common decisions: Everyday Decision-making Ability in Older Persons with Cognitive Impairment.

A clinician’s evaluation of capacity will result in a clinical opinion regarding the capacity in question. Clinicians sometimes may state that a person appears to have marginal or borderline capacity for the decision in question.

This clinical opinion can then be used by legal professionals to help them complete their legal determination of capacity.

How do Alzheimer’s disease and other forms of dementia affect capacity?

Any disease or disorder that disrupts cognition — the brain’s memory and thinking processes — can impair a person’s decision-making capacity.

In early Alzheimer’s and dementia, people usually retain the capacity to make many types of decisions, but not necessarily all of them. It all depends on the decision in question, and also on which thinking processes seem to be most affected in a particular person.

For decisions that are complex or high-stakes (e.g. those related to property or large sums of money), it is a good idea to assess the person’s capacity to make the decision in question, before proceeding.

It would also be appropriate to consider or assess capacity if the person with early dementia is making questionable decisions that affect their health or safety.

As dementia progresses over time to a moderate stage, people will lose the capacity to make all but the simplest decisions. At this point, a family member or other trusted person will generally have to make most decisions on behalf of the person with dementia. For this reason, people diagnosed with Alzheimer’s and other dementias are highly encouraged to designate a power of attorney for healthcare and for general affairs, while they still have the capacity to do so.

Does capacity have to be determined by legal professionals? Is it a “legal decision” whether someone has capacity?

Yes, in principle capacity is a legal determination and should be made by legal professionals.

However, in most states, physicians and other clinicians are allowed to determine capacity for medical decisions, especially for the purposes of enabling a surrogate healthcare decision-maker to act.

In the real world, many people take action without fully understanding the laws and procedures related to capacity, or without consulting a competent lawyer. Such actions often proceed unless another person brings suit to contest the actions.

For instance, it’s fairly common for family members and others to take action based on a physician or other clinician opining that an individual has become “incapacitated” or “incompetent.” But such actions may be on shaky legal or ethical ground, especially if actions of major consequence (e.g. sale of property) take place. So if a family suspects loss of capacity, it’s best to seek legal assistance before proceeding.

Do I have to have a legal or clinical determination of incapacity for a specific decision, before I override the decision of an older person with dementia?

Yes, you should seek a clinical assessment of capacity if you are concerned about a dementia such as Alzheimer’s disease. This is especially important if you believe it has progressed to the point that a person has lost the capacity to make certain decisions.

If you feel you need to override the person’s decisions, for instance to protect the person’s physical safety or financial wellbeing, you may need a legal determination of incapacity.

If the person with dementia has completed a durable general power of attorney, the agent should be able to act on their behalf. To override decisions made by the person with dementia, the agent will often need to provide proof that the person has lost the capacity to make certain types of decisions. Many power of attorney documents specify the criteria for deeming the principal incapacitated, although some are pretty vague about this.

If the person who has dementia has not completed a durable general power of attorney, then you will probably need to consult with a lawyer, to determine whether the person still has the capacity to designate a power of attorney. If the person is lacking this capacity, then you may need to pursue guardianship in court, in order to override the person’s decisions.

Even if you have secured a legal determination of incapacity for certain decisions, it’s vital to act in accordance with ethical best practices that respect the person’s autonomy and dignity to the greatest extent possible.

Do I need a legal or clinical determination of incapacity before I take the car keys away from an older parent who has dementia and is an unsafe driver?

If you are concerned about dementia and driving, you should make every effort to obtain a clinical assessment of capacity to drive safely. A legal determination of incapacity to drive will also help ensure you are on sound legal and ethical footing.

It’s also essential to learn more about your state’s options and requirements when it comes to reporting potentially unsafe drivers. For instance, some states require clinicians to report moderate or severe dementia to the DMV.

However, many families find that the older person in question is refusing to see a doctor or attorney. In this case, you can still call the doctor and report your concerns. Privacy laws such as HIPAA do not require families to get permission to reveal details to the doctor; they only require health professionals to have permission — or other good reasons — to disclose a patient’s information to others. If the doctor has a good relationship with the older person, they may be able to persuade them to come in for a visit.

Or, you can try calling Adult Protective Services; they don’t take a person’s car keys away but they can sometimes encourage or even insist on further evaluation. You can also try to enlist others in the older person’s social circle, to see if it’s possible to persuade the person to give up the keys.

As a last resort, if you have evidence that driving poses a substantial risk of harm to the older person and to other motorists and pedestrians, it’s reasonable to conclude that this outweighs the harm of taking a person’s keys before legal incapacity is confirmed. Such evidence might be past crashes or near-misses, combined with other evidence that the person has reached a state of moderate or worse dementia, such as frequently getting lost or appearing confused.

Of note, the Alzheimer’s Association’s position statement on driving and dementia states:

“Driving privileges must be withheld when the individual poses a serious risk to self or others. Interventions to prevent driving in individuals who lack insight include physician oral or written recommendations, taking the keys, removing the car, changing the locks, filing down the ignition key, and revoking the license.”

Is neuropsychological testing required to assess capacity?

Not necessarily. Clinicians are usually allowed to use “clinical judgment” in conducting their evaluations and reaching their conclusions.

Especially if a person has a dementia that is at a moderate or severe stage, it is often possible for a generalist physician to provide evidence of a lack of capacity, simply by interviewing the person, documenting responses that demonstrate a lack of needed understanding or reasoning, documenting evidence from family members and other observers, and providing evidence that the medical cause of the thinking problems is not likely to improve.

However, if a person’s cognitive impairments are mild, subtle, or focused in certain cognitive domains, then neuropsychological testing is often very useful. Neuropsychological testing can also be used if a preliminary clinical evaluation by a physician yields borderline or uncertain results.

Resources & References to Help You Understand Capacity

Written for the lay public:

• Legal Planning (Alzheimer’s Association)
• Assisting a Person with Dementia in Planning for the Future (Alzheimer’s Association)
• Driving and Dementia (Alzheimer’s Association)

Written for professionals:

• Assessment of Capacity in Older Adults (American Bar Association/American Psychological Association)
  • Includes links to free comprehensive guides for clinicians, lawyers, and judges
• Understanding Legal Capacity and Ethics (Practice Guide, National Center on Law & Elder Rights)
• Overview of Guardianship and Alternatives to Guardianship (National Center on Law & Elder Rights)
• Assessment of Capacity in an Aging Society (PubMedCentral)
• Clinical and Ethical Aspects of Financial Capacity in Dementia: A Commentary (PubMedCentral)

Note: I am not an attorney or a psychologist. This article is based on my review of the above resources, plus my own clinical experiences and conversations with attorneys and other experts.

This article was first published in May 2016 and was last updated in June of 2022.