Legal Series
What is Capacity?

What is Capacity?


One of the buzz words used regarding people with dementia or Alzheimer’s is “capacity.”

Sometimes it is referred to as “mental capacity.” But what does it mean when doctors or lawyers talk about a person’s capacity?

Essentially, capacity is about the ability to make decisions. Another more precise term would be “decisional capacity.” That ability to decide for ourselves is the foundation block of our personal autonomy. Our decisions shape who we are and on the flip side, our decisions are informed by our experiences, goals, values, and beliefs.

The law recognizes that a person’s independence is tied to their ability to make decisions. Therefore, the law tries to be supple with how it asks us to approach capacity. The reason this is important is because once a person is deemed incapable of making a decision, usually someone else (a substitute decision maker) will have to make that decision. Thus, a person’s independence is eroded.

How do we approach deciding whether someone has capacity or not? First, the starting point is a simple premise: everyone is presumed to have mental capacity. Only if there is a suspicion that a person cannot make a certain decision, do we test for capacity.

The key concept regarding capacity is that it is time and issue specific. Another way of putting this is that a person is judged on their ability to make a specific decision and not all decisions in general. It is rare that a person suddenly becomes wholly incapable. For caregivers of dementia sufferers, this concept can be very difficult to work with. Nevertheless, it is important to remember that capacity is recognized as a fluid, flexible concept. Particularly in early stages of dementia, a person may be incapable of making a decision regarding their health at one time, but may regain capacity and change the decision taken. Or, a person may be capable of making some decisions, for instance about their diet, but may not be able to make other decisions, such as those of household budgeting.

Decision-making is categorized in law into two broad categories:

  • Property decisions
  • Personal care decisions

Property decisions include those about finances (banking, investments, budgeting) and real estate (buying, selling or renovating property, re-mortgaging). Personal care decisions include those about health care, hygiene, clothing, shelter, nutrition and safety.

Different levels of mental competence are required for different types of decisions.

Different levels of mental competence are required for different types of decisions. For example, making a will requires a very high level ability to understand one’s assets, while the ability to marry only requires an understanding of the institution of marriage. The capacity required to manage property is also held to a high standard because a person may have to make decisions about pensions, investments, whether to sell their house, the ability to budget and pay bills, or even whether to start a law suit for a broken contract. However, to appoint someone as one’s attorney to manage these types of property decisions requires less capacity because a person only needs to understand the duties and responsibilities of an attorney and the risk involved in appointing someone else to make those decisions.

Therefore, a person is tested for their ability to make a specific type of decision. This means that if a person has been deemed incapable of making health care decisions, they will have a substitute to make health care decisions. But this does not mean that the substitute automatically makes other decisions for the person, such as those regarding finances or housing.

Tests for capacity are legal tests typically called “capacity assessments”. The result of a capacity assessment allows us to engage with the appropriate law to determine who, legally, can make the decision. The law dictates who are appropriate decision makers for various decisions.

Capacity is not a clinical assessment. For instance, patients often undergo mini mental status exams (MMSE) on a regular basis. These tests have certain uses in a health care setting. But they do not speak to decisional capacity and are not the legal test for a dementia patient’s mental capacity to make any kinds of decisions, not even health care decisions.

A finding of incapacity is made by different persons in different situations. This article will not address the test for capacity for each type of situation, but examines the core concepts of the tests for property, personal and health care decisions in Ontario.

The two laws that apply to these issues are the Substitute Decisions Act (“SDA”) and the Health Care Consent Act (“HCCA”). They work in tandem to guide us in the proper tests for certain types of decisions and who may make a decision for someone deemed incapable.

The tests are essentially governed by two concepts:

  • the ability to understand the relevant information to the issue at hand, and
  • the ability to appreciate the reasonably foreseeable consequences of a decision or lack thereof.

These concepts sound reasonably simple but they regularly create confusion.

If a person is to be judged on their “ability to understand” relevant information, they must first be provided with that information.

If a person is to be judged on their “ability to understand” relevant information, they must first be provided with that information. For instance, a person may be asked about their financial investments, however may not have seen a recent statement or perhaps never made particular investment decisions, yet may be aware of their general assets and global net worth. Thus, this question must be considered in the context of the person being evaluated. After providing the relevant information, a person should be assessed on his or her ability to remember that information, the options available, the risks of those options, and how they will address those risks if they choose to proceed in a manner that opens them to those risks.

The second part of the test, the “ability to appreciate,” is based on whether the person can make a reasoned choice. That is, does he or she have a realistic view of the potential consequences, and can he or she justify their decision? This does not mean that the person must make a “reasonable” decision based on someone else’s viewpoint, but the person must show that they are able to reason.

Capacity issues must be approached with sensitivity and appreciation for the importance of any assessment on a person. Assessments may lead to legally removing a person’s decision-making rights. This can affect a person’s sense of dignity and it also puts that person in a vulnerable position. That is why the law encourages maintaining a person’s independence for as long as possible and limits encroaching on their decisional capacity only to the extent required.


PLEASE NOTE: The information provided in this article is for informational purposes only. It is general information and should not be taken to be a full and accurate discussion of the law on this topic, nor is it intended to be legal advice or to be relied upon as legal advice by the reader.

If you have questions about capacity, you may contact the author:
Areta N. Lloyd

In Association With:
Elder Law Group

About the author

Areta Lloyd

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