A person is determined by the court to be incapacitated when they lack sufficient understanding or “capacity” to make or communicate responsible decisions concerning their daily living needs.
Arizona Revised Statutes §14-5101 1. "Incapacitated person" means any person who is impaired by reason of mental illness, mental deficiency, mental disorder, physical illness or disability, chronic use of drugs, chronic intoxication or other cause, except minority, to the extent that he lacks sufficient understanding or capacity to make or communicate responsible decisions concerning his person.”
This determination is made by the court in conjunction with a statement from a qualified physician.