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A capacity evaluation is a clinician's structured assessment of whether a person can make a specific decision at a specific time, such as consenting to treatment, managing finances, or making a will. Psychologists, psychiatrists, and physicians write them for treating teams, courts, and tribunals. Capacity is the clinical judgment; competency is the court's legal determination. Most reports run 2 to 8 pages.
Psychologists, neuropsychologists, psychiatrists, and physicians; some jurisdictions require designated capacity assessors
Treating teams, courts and tribunals, attorneys, guardians, families
1,000 to 4,000 words (2 to 8 pages) · 2 to 6 hours of interview, testing, collateral, and writing; a MacCAT-T interview alone runs about 30 minutes (clinical team estimate)
Decision-specific evaluation report (compare: psychological evaluation report, neuropsychological report)
When a specific decision is in doubt: consenting to treatment, managing money or property, making a will, or a guardianship petition
The four-abilities model is convention, partly written into state law; where a court form applies (GC-335, Form 4), content is mandated
A capacity evaluation is a structured clinical assessment of whether a person can make a particular decision at a particular time: consent to a proposed treatment, manage money and property, make a will, or decide where to live. The dominant framework is the four-abilities model set out by Paul Appelbaum and Thomas Grisso in the New England Journal of Medicine in 1988: to hold capacity for a decision, the person must be able to communicate a choice, understand the relevant information, appreciate the situation and its consequences, and reason about the options. The assessment runs decision by decision, so the same person can hold capacity for one choice and lack it for another on the same afternoon, and neither a diagnosis nor an age makes anyone incapable by itself. Clinicians and courts also call the document a capacity assessment, a decision-making capacity (DMC) evaluation, a competency evaluation, a Capacity Declaration (California), or a Capacity Assessment Report (Ontario and Alberta).
Two boundary lines organize the field. First, capacity is clinical and competency is legal: a clinician assesses and documents decision-specific abilities, while only a court or tribunal can change a person's legal status, a distinction the VA writes directly into its informed-consent directive. Second, the clinical model has been partly written into law. Many US states have incorporated one or more of the four abilities into their statutory definitions of decisional capacity, with the consequence, as a 2023 review in the Journal of the American Academy of Psychiatry and the Law put it, that "physicians in many jurisdictions are unable to modify these criteria on their own." Where a court form applies, content is mandated outright: California's GC-335 Capacity Declaration is a Judicial Council form signed under penalty of perjury, and Alberta's Form 4 must accompany guardianship and trusteeship applications. A capacity evaluation is narrower than a psychological evaluation report, which characterizes diagnosis and treatment needs broadly; the capacity report answers one legal-functional question.
Hospital consultation-liaison services carry the highest volume: a systematic review in JAMA found that 26% of medicine inpatients lack capacity for treatment decisions, against 2.8% of healthy older adults, and that clinicians had recognized the incapacity in only 42% of affected patients. Beyond the bedside, geriatric and memory clinics assess financial and testamentary capacity, psychologists and neuropsychologists write reports for guardianship and conservatorship petitions, and designated assessors complete statutory forms in the provinces that require them. Choose the document by the question: a capacity evaluation when one identified decision is at issue, a neuropsychological report when the referral needs cognitive characterization across domains, and a mental status exam to record the bedside cognitive findings that feed either one. In hospital work the capacity opinion often lands inside a consultation-liaison note rather than a stand-alone report.
Referral question and the decision at issue. Who asked, the specific decision or transaction in question, and the legal standard or court form that governs it: a statutory test, GC-335, Form 4, or the treating-consent standard. One decision per opinion; list multiple decisions separately. Pitfall: accepting a global "is this person competent?" referral; capacity is decision-specific, and a global answer is the first thing a reviewing court discounts.
Notification and consent for the assessment. What the person was told about the purpose and the report's recipients, and how they responded, including a refusal where the statute gives them that right (Ontario's guardianship assessments carry rights-information requirements). Pitfall: no record of what was explained; in guardianship work the assessment itself can be challenged before the opinion is ever reached.
Background, diagnosis, and functional evidence. The relevant history and diagnosis, plus the real-world events that prompted the referral, dated and sourced: missed medications, unpaid bills, a lease signed twice. Pitfall: letting the diagnosis do the work; dementia, psychosis, and intellectual disability are context, not conclusions, and no diagnosis equals incapacity by itself.
Method, sources, and setting. Interview dates, place, and duration; instruments used and why each fits this decision; records reviewed; collateral contacts. No statute in the US, Canada, or Australia requires a specific instrument, so state why the tools you chose serve the question. Pitfall: presenting the MacCAT-T or a cognitive screen as legally required or self-sufficient; instruments aid the judgment, they are not the judgment.
The four abilities, with decision-specific evidence. Understanding, appreciation, reasoning, and expressing a choice, each supported by what the person actually said or did with the information relevant to this decision, paraphrases in their own words included. Pitfall: conclusory ability labels ("understanding intact") with no quoted or observed evidence; unstructured clinical judgment agreed only 56% of the time across physicians rating the same mild dementia patients, and evidence is what closes that gap.
Supports, undue influence, and less restrictive alternatives. Whether education, aids, a supporter, or better timing would restore capacity for the decision; whether anyone stands to gain from the outcome; and what short of guardianship would meet the need, since modern statutes require the least restrictive option. Pitfall: silence on alternatives; a published audit found 56.4% of guardianship applications failed to link the powers sought to the person's actual vulnerabilities.
Opinion, limits, and declaration. The decision-specific opinion, its date, what could change it, a reevaluation trigger, and your qualifications in the form the jurisdiction requires, dated within any statutory window (Alberta's Form 4 must sit within six months of the application). Pitfall: opining that the person "is incompetent"; legal status is the court's call, and a strong report says so on its face.
CAPACITY EVALUATION REPORT (CONFIDENTIAL) Person evaluated: ____________________ DOB/age: _______________ Referral source(s): __________________ Report date: ___________ Decision(s) at issue (one opinion per decision): _______________ Legal standard or court form, if any: __________________________ NOTIFICATION (purpose explained, report recipients, response, right to refuse where the statute provides one) ________________________________________________________________ BACKGROUND, DIAGNOSIS & FUNCTIONAL EVIDENCE (dated events, sourced; diagnosis is context, not the conclusion) ________________________________________________________________ ________________________________________________________________ METHOD, SOURCES & SETTING (interview dates, place, duration; instruments and why each fits; records; collateral) ________________________________________________________________ DECISION-SPECIFIC ABILITIES (evidence for each, in the person's own words or observed performance) Understanding: _________________________________________________ Appreciation: __________________________________________________ Reasoning: _____________________________________________________ Expressing a choice: ___________________________________________ SUPPORTING DATA (cognitive testing with limits of scores stated) ________________________________________________________________ SUPPORTS, UNDUE INFLUENCE & LESS RESTRICTIVE ALTERNATIVES ________________________________________________________________ OPINION & LIMITS (decision-specific, dated; what could change it; reevaluation trigger; the court decides legal status) ________________________________________________________________ Examiner qualifications & declaration: _________________________ Signature and credentials: ____________________ Date: _________
Free to use and share, no signup. The PDF includes a one-page cheat sheet with section-by-section pitfalls and a pre-sign checklist; the DOCX is the blank template, ready to adapt.
Scenario: an 81-year-old widow with mild vascular neurocognitive disorder is referred for two decisions: consent to a proposed anticoagulant, and ongoing management of her finances. A licensed psychologist evaluates her at home. The sample is condensed but structurally complete; a full report runs 2 to 8 pages. All details are fictional.
Capacity Evaluation Report (Confidential). Person evaluated: E.H., 81 · Referral: A. Osei, MD (cardiology) and R. Feld, JD (Ms. H.'s attorney, at her request) · Exam dates and setting: 07/21/2026 and 07/23/2026, at her home · Report date: 07/27/2026 · Examiner: N. Reyes, PsyD, licensed psychologist
Referral questions and decisions at issue: (1) Does Ms. H. currently have the capacity to consent to, or refuse, the anticoagulant her cardiologist has proposed for newly diagnosed atrial fibrillation? (2) Does she currently have the capacity to manage her financial affairs, and if not, what is the least restrictive arrangement that would meet the need? No guardianship petition is on file; her attorney raised the second question while reviewing her power of attorney, and Ms. H. agreed to both questions being assessed.
Notification: At the start of the first visit I explained the purpose of the evaluation, that a written report would go to Dr. Osei, Mr. Feld, and Ms. H. herself, that the evaluation is not treatment, and that she could pause or decline at any point. She restated the purpose accurately ("you are checking whether I can decide about the blood thinner and the money myself") and chose to proceed.
Background, diagnosis, and functional evidence: Mild vascular neurocognitive disorder, diagnosed 03/2026 following a hospitalization for heart failure. Records and collateral (her daughter, interviewed 07/22/2026 with Ms. H.'s written consent) document two duplicate charity payments in May 2026, a property tax notice in June 2026 that went unpaid until her daughter found it, and difficulty using the bank's online system since her branch closed. She fills her own weekly medication organizer without errors, keeps her apartment, and cooks for herself.
Method, sources, and setting: Semi-structured four-abilities interviews at both visits (framework chosen as an aid; no instrument is legally required), a financial-management discussion using her own statements with her consent, the MoCA, review of hospital and primary care records, and the collateral interview. Both visits took place at her kitchen table, mid-morning, at her preference.
Decision 1, consent to anticoagulation: Understanding: she explained in her own words that the medication "thins the blood so a clot is less likely to cause a stroke" and named bleeding as the main risk. Appreciation: she connected the choice to her own condition ("my heartbeat is the reason") and to her sister's stroke. Reasoning: she weighed the bleeding risk against stroke prevention and asked how monitoring would work. Choice: she wants the medication, stated consistently across both visits. Opinion: Ms. H. currently has the capacity to make this treatment decision.
Decision 2, financial management: Understanding of her income, regular bills, and approximate balances was adequate. On functional tasks with her own documents, she could not locate or reconcile the duplicate May payments, attributed the unpaid tax notice to a bank error after reviewing it, and could not complete a two-step allocation task she chose herself. Reasoning about routine spending was intact and consistent with her values. Opinion: Ms. H. currently lacks the capacity to manage complex finances (account tracking, taxes, large or novel transactions) and retains the capacity for routine daily spending.
Supporting data: MoCA 21/30, with losses in delayed recall and serial subtraction, consistent with the 03/2026 diagnosis. The score is supporting context only; the opinions above rest on the decision-specific evidence.
Supports, undue influence, and less restrictive alternatives: Automatic payment of recurring bills, paper statements, and a standing weekly review with her daughter under the existing financial power of attorney would meet the identified need, and Ms. H. endorsed that arrangement ("the help, not the takeover"). Screening identified no indicators of pressure or influence by any party, and her stated preferences match long-held values per collateral. On these findings, guardianship is not indicated.
Opinion, limits, and declaration: The opinions are decision-specific and current as of 07/27/2026. Contributing factors (recent hospitalization, the transition to online banking) may change; I recommend reassessment of financial capacity in six months, or sooner if new errors emerge. Whether any legal arrangement should change is a question for Ms. H., her attorney, and, if ever petitioned, a court; this report informs that judgment and does not make it. I am a psychologist licensed in this state, and I examined Ms. H. in person on the dates and in the setting above. Signed: N. Reyes, PsyD, licensed psychologist, 07/27/2026.
This sample is fictional and for educational purposes. It does not describe a real patient.
Writing these after every session? BastionGPT drafts complete notes from bullets, dictation, or a transcript.
Generate a note from bulletsA capacity report travels further than most clinical documents: to attorneys, courts, tribunals, and the person evaluated, sometimes years later in cross-examination, so write for that audience and confirm the release of information pathway for anyone the referral does not already cover. Check who may lawfully perform the assessment before accepting it, because authorship is regulated in ways clinicians routinely get wrong. In Ontario, guardianship assessments under the Substitute Decisions Act may only be done by designated capacity assessors, members of listed colleges with required training and at least 1 million dollars in liability insurance, who must follow the province's assessment guidelines; treatment-consent capacity under the Health Care Consent Act, by contrast, is assessed by the practitioner proposing the treatment, no designation required. California's GC-335 accepts a physician or psychologist and is signed under penalty of perjury; Alberta's Form 4 accepts a physician, a College of Alberta Psychologists member, or a designated assessor, and must be dated within six months of the application. Retention follows your record rules, not the court's: HIPAA's six-year rule at 45 CFR 164.530(j) covers required administrative documentation, while patient-record retention comes from state and provincial law, commonly 10 years in Ontario and seven years, or to age 25, under Victoria's health-records legislation. If you or a client needs immediate support: call or text 988 (US), 9-8-8 (Canada), or Lifeline 13 11 14 (Australia).
Billing turns on one question: is the evaluation part of diagnosis or treatment, or is it for a legal proceeding? Treatment-linked assessment and any medically necessary testing are billable in the ordinary way, subject to Medicare's testing LCD (L34646). Court-ordered and forensic capacity work generally is not: Medicare excludes services that are not for diagnosis or treatment, and 42 CFR 411.4 adds the exclusion for services a legal process is responsible for arranging. The practical route is the one coding forums describe: code the encounter with Z04.6, the ICD-10 code for an evaluation requested by an authority, obtain an advance notice where Medicare might otherwise be billed, and bill the requesting party directly under a fee agreement. Report preparation for a third party (90889) is not a Medicare benefit, and record review (90885) is not separately payable. Australia mirrors the split: medico-legal reports sit outside MBS treatment items, and the Professional Services Review has ordered repayment of roughly 100,000 dollars where records did not support what was billed. Capacity work is legal-adjacent by nature: when a guardianship petition, subpoena, or contested assessment is in play, involve your attorney or licensing board before acting, because state and provincial rules vary.
The audit trail for capacity work runs through courtrooms as much as payers. When researchers reviewed 183 guardianship applications for a 2016 BJPsych Bulletin study, clinicians had failed to apply the statutory capacity definition explicitly in 47.5% of reports, and 56.4% of applications did not link the powers sought to the person's actual vulnerabilities; Ontario built its assessment guidelines partly because assessors applying the wrong legal test were producing inappropriate findings. On the payer side, a federal OIG review of psychological testing in nursing homes found 39% of the testing medically unnecessary, an audit finding from the 1999 to 2001 reviews that still shapes contractor scrutiny of testing claims. The reliability literature explains why evidence matters: five physicians judging the same mild Alzheimer's patients agreed on capacity only 56% of the time, against 98% for healthy controls. The BastionGPT Clinical Advisory Board sees the same errors most often in capacity evaluation reviews:
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It depends on the jurisdiction and the decision. California's GC-335 Capacity Declaration accepts a physician or a licensed psychologist. Ontario splits it: guardianship assessments under the Substitute Decisions Act require a designated capacity assessor drawn from listed professions with mandatory training, while treatment-consent capacity under the Health Care Consent Act is assessed by the practitioner proposing the treatment. Alberta's Form 4 accepts a physician, a College of Alberta Psychologists member, or a designated assessor. Check the governing statute before you accept the referral.
Capacity is a clinical judgment: a clinician's assessment of whether the person can make a specific decision now. Competency, or legal capacity, is a legal status that only a court or tribunal can change. A capacity evaluation informs the court; it never removes anyone's rights by itself, and a well-written report says so. The VA draws the same line explicitly in its informed-consent policy.
No. No US, Canadian, or Australian statute reviewed for this page mandates the MacCAT-T, the Aid to Capacity Evaluation, or any other instrument, and none requires formal cognitive testing. Structured tools earn their place on reliability: the MacCAT-T interview takes about 30 minutes, the ACE about 10 to 20, and structure sharply narrows examiner disagreement in borderline cases. Choose the aid that fits the decision and record why you chose it.
Only when it is part of diagnosis or treatment. A bedside evaluation of consent capacity during care is clinical work, billable in the ordinary way. A court-ordered or attorney-requested evaluation generally is not: Medicare excludes services that are not for diagnosis or treatment and services a legal process is responsible for arranging, so practitioners code the encounter Z04.6, use an advance notice where relevant, and bill the requesting party directly under a fee agreement.
No. Capacity is decision-specific and functional, and the systematic review behind modern practice found cognitive screens carry limited diagnostic value for it except at the extremes. A score belongs in supporting data, framed by what the person actually did with the information relevant to the decision. Two people with the same score can differ on the same decision, and one person can hold capacity for treatment consent while lacking it for finances.
Most stand-alone reports run 2 to 8 pages (1,000 to 4,000 words) and take 2 to 6 hours of interview, testing, collateral, and writing. Bedside treatment-consent determinations are usually shorter and live inside a consultation-liaison note or progress note, while statutory forms like GC-335 and Alberta's Form 4 set their own structure.
A neuropsychological evaluation characterizes cognitive strengths and deficits across domains; it often feeds a capacity opinion but does not answer it, because capacity turns on how the person handles one identified decision, not on scores alone. Order a capacity evaluation when a specific decision is in question; order a neuropsychological evaluation when the referral needs the cognitive map.
Where the statute sets a window, follow it: Alberta's Form 4 must be dated within six months of the guardianship or trusteeship application. California sets recency by local court practice rather than a single statewide number, and other jurisdictions vary. Everywhere, the working rule is the same: the assessment must reflect the person's current abilities, so a material change in condition means reassessment regardless of the calendar.
Yes. Give it the referral question, your interview notes, and any instrument summaries, and it drafts the report with the four abilities organized decision by decision, then checks that every ability carries evidence, the statutory standard is named, and less restrictive alternatives are addressed. BastionGPT is HIPAA-compliant with a signed BAA on every plan, and your data is never used to train models.
Educational content, not legal or billing advice. Sample notes are fictional. Follow your organization's policies and your board, payer, and jurisdiction requirements.