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If Mother can't make decisions, then the POA does -- that is exactly what the POA is set up for. The POA cannot make decisions about what other people will do. For example, she cannot tell you that you have to be responsible for lawn care, and somebody else needs to paint a room. The POA can decide "the lawn needs to be mowed regularly" and family members can volunteer or she can hire someone to do it. She can't set requirements for other family members.
If your mother is on or plans to apply for Medicaid to pay for the NH, it would be a good idea for the POA to spend some of your mother's money to consult an attorney who specializes in Elder Law to determine the best ways to handle the house. Of course you cannot insist on that, but you might pass the idea on to her.
(Your niece is your mother's granddaughter, right? Hmm. I now have one of my children listed as POA. I wonder if/when it would be good to switch to a grandchild.)
This will undoubtedly affect you.
Do you live with Mom?
Were you caregiving Mom?
Do you want her to go?
At this time who inherits the house is immaterial. That comes into play only once your mother has passed away. At which time POA authority ends and it becomes the responsibility of the executor to follow instructions set in your mothers will as to dispersement of assets.
It may come to pass that the house needs to be sold prior to your mothers death - so it would be wise to not count any chickens prior to hatching. Just saying...