Mental capacity explained
Guidance from Estate Advisory Group
Written and legally reviewed by Ramani Gill TEP, Solicitor and private client practitioner·Last reviewed 13 August 2026
Capacity is decision-specific and time-specific. Someone can lack capacity to manage investments yet be perfectly able to decide where they want to live.
The legal test
Under the Mental Capacity Act 2005 a person lacks capacity for a decision if an impairment of the mind or brain means they cannot do one of four things:
- Understand the information relevant to the decision.
- Retain it long enough to decide.
- Weigh it up to reach a choice.
- Communicate the decision in any way.
The Act starts from a presumption of capacity, and an unwise decision is not evidence of incapacity.
Capacity to make an LPA
The donor must understand what an LPA is, that attorneys will be able to make decisions for them, and that they can restrict or cancel it while they are able. Your certificate provider signs to confirm this.
A diagnosis is not a bar
Early-stage dementia does not automatically prevent someone making an LPA, but it does make timing urgent and makes a GP or solicitor a wiser choice of certificate provider. See LPAs after a dementia diagnosis.
Fluctuating capacity
Capacity can vary through the day or with illness, medication and infection. Where it fluctuates, an LPA should be discussed and signed on a good day, ideally with a professional assessment recorded at the time in case anyone later challenges it.
The five statutory principles
Section 1 of the Mental Capacity Act 2005 sets out five principles that apply to every capacity question, not just LPAs:
| Principle | What it means in practice |
|---|---|
| Presumption of capacity | Assume someone can decide unless it is proved otherwise |
| Support to decide | Give all practicable help before concluding someone lacks capacity |
| Unwise decisions allowed | A decision others disagree with is not, by itself, evidence of incapacity |
| Best interests | Anything done for someone lacking capacity must be in their best interests |
| Least restrictive option | Choose the option that interferes least with the person's rights and freedom |
Worked example
Harold, 81, has mild cognitive impairment following a series of small strokes. He can no longer follow the detail of his share portfolio and struggles with online banking, but he clearly understands what a Lasting Power of Attorney is, who he wants to appoint, and that he can cancel it while he is able. His GP, acting as certificate provider, assesses him against the LP1F wording rather than against his ability to manage investments, and confirms he has the specific capacity needed to make the LPA. Two years later, when Harold can no longer hold a coherent conversation about his finances at all, his son and attorney, Michael, is already able to step in because the document was made in time.
Assessing capacity in practice
- Capacity is assessed for one decision at a time — someone can lack capacity for complex financial decisions but retain it for simple day-to-day ones.
- There is no single certificate or test result; it is a judgement applied to the specific decision in front of the assessor.
- A certificate provider is confirming capacity to make the LPA itself, not capacity to manage money or health decisions generally.
- If there is real doubt, a GP or a specialist capacity assessment can be arranged and the outcome recorded in writing.
Common questions
Who decides whether someone has capacity?
In practice whoever needs to rely on the decision — a certificate provider, GP, solicitor or bank. Formal assessments are usually done by a doctor or specialist capacity assessor.
What if capacity has already been lost?
An LPA is no longer possible. A family member must apply to the Court of Protection to become deputy instead.
Can someone with dementia still make an LPA?
Often yes, particularly in the early stages. Capacity is about understanding the specific decision, not the diagnosis, so many people remain able to make an LPA for some time after diagnosis.
Does an unwise choice of attorney mean the donor lacks capacity?
No. The Act specifically says an unwise decision is not evidence of incapacity. Concerns about the choice of attorney are a separate issue from whether the donor understood what they were doing.
Read next
Where this fits
This page is part of LPA basics. The pages below take it further.
- Make an LPA online
The whole journey end to end: questions, documents, signing and registration.
- Solicitor, GOV.UK or online?
An honest comparison, including when you genuinely should pay a solicitor.
Review and sources
Reviewed by Ramani Gill TEP, Solicitor and private client practitioner. Last reviewed 13 August 2026. We recheck fees, forms and Office of the Public Guardian guidance whenever they change — see our editorial policy.
Official sources
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This is general information about how Lasting Powers of Attorney work in England and Wales. It is not legal advice about your situation. What we do and do not do.
Published by Estate Advisory Group