Also known as:decision making capacity · decision-making capacities · decisional capacity · mental capacity · capacity to decide
Written by attorneys · grounded in primary & secondary sources — see below
The mental ability of a person to understand the nature and consequences of a particular act or transaction and to make a rational decision regarding it. This ability is assessed at the time the act occurs. A person lacking this ability cannot validly perform the act.
Sources & Authorities
How it applies
Common Examples
3
Irrevocable Portfolio Assignment
Deanna Davenport recently underwent surgery and was taking strong pain medication when she met with her investment advisor. At the meeting she executed an irrevocable assignment transferring her entire portfolio into a speculative hedge fund. Her spouse had no independent income and a pending long-term care insurance application. Because the medication impaired her understanding of the gift's effect on her own and her spouse's future financial security, the assignment is invalid.
Intoxicated Marriage Ceremony
Demetrius Douglas spent the afternoon drinking hard cider and smoking marijuana. During the evening marriage ceremony he was visibly intoxicated, laughed inappropriately, and required repeated prompting to recite his lines. Because capacity is measured at the precise moment of the ceremony and he could not understand his actions or agree to them, the marriage is invalid.
Put it into practice
Test Yourself
9
Practice Questions5
· 4 primary sources
Select any source to read its text and confirm it supports the definition.
Cases
Uniform Acts
Model Codes
Common Law
Restatements
Study Supplements
Irrevocable Deed to Housing Company
Doris Duffy, an eighty-eight-year-old resident of an assisted-living facility whose primary income came from rental properties, hurriedly signed an irrevocable deed transferring one building to a company formed by her caregiver's son. She occasionally confused family members and tenants and relied on the rental income for support. Because she did not understand the effect of the permanent transfer on her future financial security, the deed is invalid.
Common questions
Frequently Asked
4
How is decision-making capacity assessed when a person has fluctuating lucidity due to medication or illness?+
Capacity is evaluated at the exact time of the act. Evidence such as staff notes of confusion, disorientation, or repeated questions during the transaction can establish lack of capacity even if the person appeared coherent at other moments.
Supporting sources
Does a prior adjudication of incompetence automatically determine capacity for a later transaction?+
No. Capacity is a factual question assessed at the time of the act. A prior adjudication is relevant but not conclusive. The inquiry focuses on whether the person could understand the nature and consequences of the specific transaction.
Supporting sources
What additional showing is required for capacity to make an irrevocable gift compared with a will?+
The donor must possess the capacity needed to make or revoke a will and must also understand the gift's effect on the donor's future financial security and on the security of anyone dependent on the donor.
Supporting sources
Can a person under the influence of alcohol or drugs lack capacity to marry?+
Yes. Capacity is measured at the moment of the ceremony. Visible intoxication that prevents understanding the actions and agreement renders the marriage invalid.
Supporting sources
ContractsDefenses to enforceability · Incapacity to contractUBEFoundational