“Capacity” is a medical determination that is broadly used to describe a person’s ability to act in a legal environment, as well as the level to which they are accountable or responsible for their actions. The incidence of cases in which capacity is an issue has grown substantially in the past few years because of the aging demographic and the increasing number of cases involving serious mental illness, substance and/or alcohol abuse, or other related mental health concerns. In civil matters, capacity issues arise as to contracts (e.g. is the party capable of entering into, or suing pursuant to a contract), executing advance directives, such as a Healthcare Proxy, Living Will, or Power of Attorney, in Guardianship proceedings under Article 81 of New York’s Mental Hygiene Law, and as to a patient’s right to consent to and/or refuse medical treatment. As such, different statutes will define capacity as it is applicable to that particular area of law. This CLE program will address the difference between “capacity” versus “competence”, review ABA Model Rule 1.14: Client with Diminished Capacity, and analyze the standards of capacity for specific legal transactions.