The term "legal capacity" is heard often in a variety of legal situations, usually to define someone who is able to understand and appreciate the consequences of his or her actions. A person who lacks legal capacity cannot, for example, enter into a contract, give a power of attorney, make a Will, consent to medical treatment, or transfer property. The older we become, the more likely we are to suffer from a mental disease or disability that can diminish decision-making capacity. Fortunately, we can delegate an alternate decision maker by executing powers of attorney for finances and health care. In order to execute such documents, however, one must do so before they become incapacitated.
Unfortunately, there is no standardized procedure or test that will determine whether a given person has legal capacity. Such a determination must be made on a case-by-case basis, weighing all of the facts and circumstances. Proper execution of a legal document requires that the person have the mental "capacity" to understand the implications of the document.
Assessing whether someone has the required legal capacity is difficult on two levels. First, the requisite capacity can vary depending upon the type of legal document to be executed. For example, the legal capacity required to enter into a contract is different than the legal capacity required to make a Will or to execute a power of attorney. Second, a person's abilities and function can vary from day to day depending upon the course of their illness, fatigue and the effects of medication.
It can be risky to prepare and execute legal documents on your own without representation by an attorney, particularly if legal capacity is questionable. An attorney who specializes in estate planning or elder law can advise you about the level of capacity necessary to execute a particular legal document and may also identify solutions where capacity is already diminished to the extent that legal documents cannot be executed.