There is no one single standard for whether someone has the mental capacity in law to make decisions. Someone suffering from dementia may have the ability to make certain kinds of decisions but not others.
The decision in Moore v. Drummond, 2012 BCSC 1702, illustrates this. Bruce Drummond challenged his mother’s will dated January 18, 2010 on the grounds that she did not have the mental capacity to make a will. In her will, Dorothy Drummond, who went by the name Dee, left her entire estate to her two neighbours, Kenneth Moore and Clara Moore. She was 97 when she made the will, and died a year later.
The will was drafted by an experienced lawyer, John Perry, who had taken instructions from her at her home in Smithers,
British Columbia. Mr. Perry considered that
she was disinheriting her son, and took additional care in getting
instructions. She knew generally what her assets were, a house and two bank
accounts, although she inaccurately said one had $25,000. She said her son did not visit her, and Mr. and
Mrs. Moore had been good to her. Mr. Perry concluded that she had a sufficient
level of mental functioning to make a will.
Unknown to Mr. Perry when he was taking will instructions from Ms. Drummond, and witnessing her will, her physician, Dr. Blouw, had examined her on January 11, 2010, at the request of the Public Guardian and Trustee of British Columbia to assess her capacity to manage her financial and legal affairs. Ms. Drummond’s credit union had contacted the Public Guardian and Trustee after she had made an unusually large withdrawal of over $5000 to pay an informal care giver to drive her around over the following year. After examining her, Dr. Blouw concluded that she did not have capacity to manage her legal and financial affairs.
In considering whether she had the mental capacity to make a will, Mr. Justice Nathan Smith set out a nice summary of the legal principles, part of which reads as follows:
 The frequently quoted test for testamentary capacity comes from Banks v Goodfellow (1870), 5 QB 549 at 567:
... [The testator] ought to be capable of making his will with an understanding of the nature of the business in which he is engaged, a recollection of the property he means to dispose of, of the persons who are the objects of his bounty, and the manner in which it is to be distributed between them. It is not necessary that he should view his will with the eye of a lawyer, and comprehend its provisions in their legal form. It is sufficient if he has such a mind and memory as will enable him to understand the elements of which it is composed, and the disposition of his property in its simple forms.
 In Leger v. Poirier,  SCR 152 at 161, the Supreme Court of Canada used the term "disposing mind and memory", which it defined as “one able to comprehend, of its own initiative and volition, the essential elements of will-making, property, objects, just claims to consideration, revocation of existing dispositions, and the like ...”
 A more recent formulation of the test is found in Re Schwartz,  2 OR 61 at 78 (CA), aff'd  SCR 150 where Laskin J.A. (dissenting on other grounds) summarized the elements of testamentary capacity:
... The testator must be sufficiently clear in his understanding and memory to know, on his own, and in a general way (1) the nature and extent of his property, (2) the persons who are the natural objects of his bounty and (3) the testamentary provisions he is making; and he must, moreover, be capable of (4) appreciating these factors in relation to each other, and (5) forming an orderly desire as to the disposition of his property....
 This does not mean the testator must have perfect mental capacity for all purposes or be able to remember all details. Diminished capacity does not equate to lack of capacity and a person who has been deemed incapable of managing his or her own affairs may still be able to make a valid will: Royal Trust Co v Rampone,  4 WWR 735 at 743 (BCSC).
Mr. Justice Smith found that despite her diminished capacity, Mrs. Drummond more likely than not had the mental capacity to make a will. Dr. Blouw was not asked to opine on whether she had the capacity to make a will, but rather on her ability to make day-to-day financial decisions. In contrast, Mr. Perry focused specifically on her understanding of making a will before concluding that she did have capacity. Mr. Justice Smith wrote:
 When she gave instructions for the will and signed it,
Dee’s mental condition was deteriorating. But she was able to accurately tell Mr. Perry that her property consisted of her house and two bank accounts, although she did not accurately recall the current balance in those accounts. She was able to articulate reasons for disinheriting Bruce. She was inaccurate in that she apparently did not remember instances of his coming to visit, but her decision was consistent with a negative attitude toward him that she had expressed on many occasions. She was also able to articulate her reason for favoring the Moores, which was consistent with their long-standing friendship. This is not a case of an elderly and infirm testator suddenly making a will in favour of someone he or she has known for only a short time.
 The weight that can be given to Dr. Blouw’s opinion suffers from the fact it was prepared solely for the purpose of answering the PGT’s specific question in the form requested. It is not a proper expert report for trial purposes because it does not fully set out the facts, observations or assumptions on which it was based. Dr. Blouw may have been able to more fully set out these matters had she been asked to prepare a proper medical opinion for use in this case, but she was not.
 Dr. Blouw’s opinion was also a general one that commented in the abstract on
Dee’s ability to manage her affairs. Unlike Mr. Perry, she was not focussing on Dee’s competence in relation to a specific transaction or decision.
 I accept Dr. Blouw’s opinion to the extent that Dee was probably not capable of making day-to-day financial decisions as matters arose but, as the authorities point out, that is not necessarily determinative of testamentary capacity. On that issue, I prefer the evidence of Mr. Perry who was focussed on the question of testamentary capacity, as well as undue influence, and satisfied himself on the basis of his interview, observations and extensive experience.
 I also give some weight on the fact that
Deesubsequently spoke of the will and its exclusion of Bruce. That provides further re-assurance both on the question of her memory and on her understanding of the will-making process and its consequences.
 I therefore conclude on the balance of probabilities that Dee Drummond had testamentary capacity when she made her will January 18, 2010.
Although the Court has found that the will is valid, Mr. Drummond may still proceed with a claim to vary the will pursuant to the Wills Variation Act on the basis that his mother did not make adequate provision for him.