Competence or decision-making capacity are concepts, which are far from clear-cut. The normative consequences of an incapacity-judgment in elderly care require a balanced approach, which takes into consideration the risk of misuse in the context of the justification of interventions that are applied without consent of the patient. In this article a number of central issues in the debate on decision-making capacity are discussed. The different criteria, which are proposed to assess capacity, are discussed as well as the development of instruments in order to objectify capacity. It is concluded that the common approach towards decision-making capacity, which is strongly cognitive-oriented, is inadequate. A number of relevant aspects remain underexposed within this approach. A broader approach is explored, which takes into account the role of emotions, identity, and dialogue and deliberation. The different approaches are illustrated by way of a case example.