Who made the determination, the NBA?
Dennis Rodman.
It's in the article:
The rules of the Sterling family trust did not require a court to declare Donald Sterling mentally incapacitated.
If this is correct, the family trust apparently has a clause that allows a trustee to be declared incapacitated. I'll guess that Donald and Shelley were co-trustees, and declaring him incapacitated left her in control.
He will still be a beneficiary. But, she is now "driving".
Some shrink at the request of the family I assume. I don't think this kind of determination happens in a hurry. His wife has probably been working on having him declared mentally incompetent for some time now.