If a person has Dementia, who decides when they have become incompetent?

If there is no lasting power of attorney and a person has reached a level of dementia where they `may` be classed as incompetent to act on their own behalf, who decides if this position has been reached. Also when this happens are family members not allowed access to any bank or building society accounts even for the smallest purchases until they have been granted `Deputy` status by the `Office Of The Public Guardian`