I think your first step is to consult an attorney who can figure out for him/herself whether APS has legally revoked the POA. So I would certainly suggest consulting with a second attorney about this matter. To invalidate a power of attorney would require court action unless the principal is competent and has properly revoked the power of attorney him/herself. Such court action would require either a filing for a guardianship, a petition to remove the sister as the fiduciary or some similar legal procedure and I don't think it would be a secret that this matter was underway (or at least not a secret to your sister).
My guess and that's all it is --- is that there has been some discussion between someone at the nursing facility and someone at the APS office. I do not think the POA has been revoked but someone has clearly said something that is making the nursing home refuse to honor the POA.
It is not at all clear how involved you really are in this matter but I would certainly consider it a "red flag" that your sister has "recently asked [you] to help sort out his finances" and there is also a potential APS allegation of financial exploitation...
I would strongly consider getting a second legal opinion before doing anything here, particularly before assisting the sister with any transactions until you have more information about what is really going on.
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I concur with Attorney Tate Davis' advice on getting a second opinion and would add that as a practical matter, since the NH is refusing to honor the POA, the only recourse may be to petition the court to have a guardian/conservator appointed.
I agree that you should seek legal counsel regarding the advisability of obtaining guardianship/conservatorship in this situation. I also concur with the advise of getting with an attorney prior to assisting your sister with anything. Good luck.
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I practice in PA, don't know TX law but normally only the principal (uncle?) can revoke or a court can revoke a POA. Not sure if APS went to court and revoked it. Talk to a local lawyer there about your options-another POA or a guardianship.