Grappling with elder issues in family. who evaluates and deems someone incapable of making decisions? the courts? how?

Mental competence: Usually two physicians, one of them preferably psychiatrist. If in case of dispute, courts will decide. Check with your local physicians and attorneys, the rules may differ from state to state.

Difficult issues: If your family member recognizes the need for help, s/he may agree to delegate power of attorney on health, legal, & financial issues to you. If not, & you can see there are difficulties, the process is harder. As dr. Rao says, neuropsychiatric evaluation is needed. If this diagnosis supports incapacity but the elder person disagrees, you will need court involvement for guardianship. Painful.