Capacity Assessment for Power of Attorney in the ACT

Capacity is the hinge point of every enduring power of attorney in the ACT. Your parent needs capacity to sign an EPA. They need to lose capacity before health care and personal care powers activate. And the question of whether capacity existed at the time of signing can be challenged years later if a family dispute arises. Understanding how capacity is assessed — and who assesses it — is critical for both creating and activating an EPA.

The Legal Test for Capacity

The Powers of Attorney Act 2006 doesn't define capacity in a single neat sentence. The standard drawn from the Act and supporting case law requires that the person can:

1. Understand the nature and effect of the document they're signing — what an EPA is, what powers it grants, and who they're appointing
2. Retain that information long enough to make a decision about it
3. Weigh the relevant considerations — the implications of granting these powers, the trustworthiness of their chosen attorney, the risks involved
4. Communicate their decision, whether verbally, in writing, or through other means

This is a functional test, not a diagnostic one. A person can have a diagnosed medical condition — early-stage dementia, an intellectual disability, a brain injury — and still possess decision-making capacity for the specific purpose of executing an EPA. Conversely, someone with no diagnosis might temporarily lack capacity due to medication, delirium, or acute illness.

Capacity is also decision-specific. A person might lack capacity to manage complex financial affairs while retaining capacity to make personal care decisions. The assessment must address the specific type of decision the EPA covers.

Who Conducts the Assessment

There's no statutory requirement in the ACT for a formal capacity assessment before signing an EPA. The witnessing requirements provide some safeguard — each witness must sign a certificate stating that the principal appeared to understand the nature and effect of the document and signed voluntarily. But the witnesses aren't required to be medical professionals.

In practice, a capacity assessment becomes important in two scenarios:

Before signing (protective). If there's any doubt about the principal's capacity — family members have noticed cognitive changes, a GP has flagged concerns, or the principal has a known condition like dementia — getting a contemporaneous medical assessment creates evidence that capacity existed at the time of execution. This assessment is your best defence against a future challenge.

Before activation (triggering). When the EPA contains springing property powers (activated only upon capacity loss) or when health care and personal care powers need to take effect, a registered medical practitioner must certify in writing that the principal has lost decision-making capacity.

The assessing practitioner is typically the principal's GP or a medical specialist such as a geriatrician or psychiatrist. A neuropsychologist may provide supporting evidence, but the written certification required for activation must come from a registered medical practitioner. There's no prescribed form for the assessment — it should be a written report that addresses the four-part test above and relates it to the specific decisions covered by the EPA.

The Borderline Capacity Situation

Dementia progresses gradually, and there's often a grey zone where capacity fluctuates. A parent might be lucid in the morning and confused by afternoon. They might understand simple financial transactions but struggle with complex property decisions.

If your parent is in this grey zone, timing matters. Book the capacity assessment for a time of day when they're typically at their best. Ensure they've had adequate sleep, are well-hydrated, and aren't affected by medication that might impair cognition. The assessor should note the time, setting, and any factors that might have influenced performance.

For signing an EPA, the relevant moment is the time of execution. If a GP assesses capacity at 10am and the EPA is signed at 10:30am on the same day, that contemporaneous assessment is strong evidence. An assessment from three months earlier is much weaker, especially if the condition is progressive.

For activating powers after capacity loss, the assessment should be recent enough to reflect the current state. A six-month-old assessment may not accurately represent the person's current abilities.

Challenging an EPA on Capacity Grounds

If a family member believes an EPA was signed when the principal lacked capacity, they can apply to ACAT for a review. ACAT will examine the evidence surrounding the signing — the medical assessment (if one exists), the witness certificates, the testimony of the witnesses, and any other relevant evidence of the principal's mental state at the time.

Without a medical assessment, the challenge relies on circumstantial evidence: the principal's medical records, testimony from family members and carers, and the opinions of treating doctors. This is inherently less reliable than a contemporaneous assessment, which is why getting one is worth the modest cost and effort.

ACAT can declare the EPA invalid if it finds that the principal lacked capacity at the time of execution. If the principal has since lost capacity, an ACAT management order is needed for property decisions the invalid EPA would have covered; an ACAT guardianship order may be needed for personal-care decisions, while standard medical and dental treatment can fall under the statutory Health Attorney framework.

What to Bring to the Assessment Appointment

If you're arranging a capacity assessment for a parent, help the process by bringing:

• The draft EPA document (so the assessor can see what specific powers are being granted)
• A list of the parent's current medications
• A summary of any cognitive symptoms family members have observed
• The parent's medical history, particularly any neurological conditions
• Contact details for the parent's treating specialists

The assessment itself typically takes 30 to 60 minutes. The practitioner will ask questions about the person's understanding of the document, their reasons for choosing their attorney, and their awareness of the implications. Some assessors use standardised cognitive screening tools (like the MMSE or MoCA) alongside the EPA-specific questioning.

Our Australian Capital Territory Power of Attorney Kit includes a capacity assessment preparation guide and a discussion template for the medical appointment, designed to give your parent's doctor the context they need for a thorough assessment.

Get the ACT Power of Attorney Kit to navigate the capacity question with confidence.

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