In Anglo-American law, the concept of mental "capacity" is used to measure the degree to which an individual has the "mental ability to understand the nature and effects of one's acts" as determined by a medical or cognitive assessment of an individual's mental ability. Based on an individual's mental capacity, the law decides whether the individual had sufficient capacity to engage in the action in question. The legal concept of mental capacity, therefore, is the basis for "when a state legitimately may take action to limit an individual's rights to make decisions about his or her own person or property." Different actions require different levels of mental capacity.
The more complex the act or decision, the greater the level of capacity required; the requisite level of capacity varies with the situation. The required degree of legal capacity can be thought of as existing on a spectrum so that the legal capacity sufficient to perform certain acts may be considered insufficient to perform others. For example, the legal capacity required to make a will ("testamentary capacity") is lower than that required to enter into a valid contract. Consequently, in many jurisdictions, even though an individual has been found to lack the capacity to contract, the individual may still be found to have the requisite capacity to make a valid will.
This article discusses the levels of capacity required to undertake a variety of legal acts, including executing valid wills, trusts, gifts, powers of attorney and contracts. This article also explores a doctrine that is closely related to the determination of testamentary capacity, the doctrine of "undue influence." Undue influence lies in the shadow land between testamentary capacity and the capacity to contract and is used by probate courts to invalidate the will of an individual whose capacity level is high enough for testamentary capacity, but too low to enable the testator to resist the importuning of another.