My aunt has POA over my grandmother which has been in place for over 10 years. Grandmother is currently sound of mind completely competent. But my aunt has self diagnosed her "losing her mind" and wants to move in her house and kick my sister out whom has lived there for over 3 years. Can she do this? Does she have to legally evict her?
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In this country, anyone can hire a lawyer and sue anyone for anything. It is one of our privileges. However, winning that lawsuit is never a given.
Make sure your grandmother actually wants you to pursue this avenue. Since she is "of sound mind", she has the right to make decisions even if you don't like that decision. Right or wrong, it is hers to make until, and only until, she has been deemed incompetent. Otherwise, you are making decisions in your best interest, which is what you accuse the aunts of doing.
Best wishes.
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This can all be resolved very simply -- the legal part, that is, not necessarily the family dynamics. Gram can go to an Elder Law attorney and draw up new POA documents, so the aunts (her daughters?) no longer have that role. Encourage her to use a lawyer. Do-it-yourself forms are well and good when there is no one disputing them, but in this case you want the expertise of a lawyer involved.
If Gram doesn't want Aunt to move into her house, the POA does NOT give Aunt the authority to do that, into the bigger or the smaller room.
But instead of fighting over what authority Aunt has, why doesn't Gram simply revoke all authority?
Unless your sister morphs into a virus that threatens your grandmother's life (and I'm obviously being facetious), I don't see how the medical proxy could authorize or justify evicting her.
Apparently what your aunt is pursuing however, is a more circuitous route in attempting to lay the foundation for an incompetency declaration of your grandmother, to remove her from the premises and take over.
Since you've stated that a neurological exam has not confirmed this alleged diagnosis, I don't see how your aunt's plan could succeed. I do, however, see that she can make a lot of trouble and cause a lot of aggravation unless she's stopped. Perhaps it's time to contact the police.
Gram is in charge of who lives in her house.
Having someone declared incompetent is far more than a layperson observing that she is "losing her mind."
What does Gram want in this situation?
"Can grandchildren have rights over children?
https://www.agingcare.com/questions/grandchildren-have-power-of-attorney-over-children-182635.htm
It's easier for anyone who hasn't read or answered your first post to follow the family dynamics by reading that post first.