How would you make a determination of someone else's mental capacity?

Lets say you have an elderly family member. We’ll call her Grandma.

Grandma has a multitude of medical issues (heart failure, diabetes, thyroid dysfunction, kidney failure, etc.). She tries to play pharmacist and alters her medication regimen without medical advice. She sleeps ~20 hours a day and doesn’t even wake up to take vital medication.

Let’s say you have another family member… an uncle. Uncle convinces Grandma that they should take a vacation to Florida. Grandma agrees.

Given her fragile health state, poor decisions, excessive need for sleep and her physical reliance on others for daily activities (bathing, dressing, cooking, etc.) it does not appear to the rest of the family that this is a good decision (the last time she went to FL, an aunt had to fly down and fly her back home and nurse her back to health).

My perspective (you were going to ask, right?) is that (a) she doesn’t care about living and, what the heck, might as well go to Florida one more time or (b) she lacks mental capacity to understand the consequences of her actions, perhaps even lacks the capacity to understand her medical advice.

Feel free to comment on this scenario if you wish, but my real questions are:
– How would you determine if someone has mental capacity?
– What variables (I’m a stats person) would you use to calculate capacity?
– Does personal choice trump questionable capacity?