None of these diagnoses, by themselves, would render your mother incompetent to sign documents. It is a matter of degree. Her statement that it is too late may be a reflection of her depression. While she may refuse to go see an elder law attorney, most experienced elder law attorneys make house calls.
The likelihood of finding an American attorney who is familiar with elder law in Italy is remote. The issue is whether there is a filial responsibility law in Italy and whether it can be enforced in the US. Since your father is an Italian citizen, I suggest you contact the Italian embassy. I will change the practice area of your question to get it before attorneys would do international law. Perhaps they have an answer.
You can either petition the court for guardianship, which will no doubt be fought by your siblings, or you can report your concerns to Adult Protective Services who will investigate and take action if they determine elder abuse has occurred.
I person should never count on funeral instructions contained in their Will to be followed. Think about it. If you say you want buried in your Will, that document might not be found until after the funeral and if they cremate you it is too late to do anything about it. Even if you tell your wishes to all your friends and family they may forget. The safest and best way to handle your funeral and make your wishes known is to go to the funeral home and purchase a pre-paid funeral plan. The funeral...
In order to have a successful claim against the estate you will probably need to have had a written care agreement in place, otherwise the heirs can claim you acted out of love and affection. You need to make an appointment and consult with a probate attorney.
At this point you should gather all the paperwork up and take it to a probate attorney to review and give you advice. One problem with short form, small estate, or summary probates, by whatever name, in most states they do not cut off creditor claims. A lawyer might be able to write a letter to the creditor explaining that there are really no assets to speak of.
Medicaid, not Medicare, should be your concern. Medicaid is a means tested program, meaning that a person can only have a limited amount of resources in order to qualify. You need to talk in private with an elder law attorney who does Medicaid planning in your mother's state to get advice and have the options explained. .
It is up to your mother to pursue your sister-in-law since it is your mother who is being harmed. If she is unable to due to incompetency, then a guardianship will need to be filed. The issue will be whether the transfer was intended as a sale or a gift. Hopefully there was some documentation to show the intention that the property was being sold. If your mother suffered from diminished capacity when the transfer was made, or if she was exploited or otherwise defrauded into the transfer, then...