It sounds like you have a major headache on your hands!
Since it sounds like your mother lacks capacity to sign a new POA form, it sounds like guardianship is the last resort. You can find the Petition, here: http://courts.mi.gov/administration/scao/forms/courtforms/guardian-conservator/pc625.pdf
Oakland County Probate also has some helpful information on Guardianships, here: http://www.oakgov.com/courts/probate/Documents/in-house/1-guard-conserv-adults.pdf
Since your sister has the POA, you may not need to petition for conservatorship, as well. An attorney is not necessary, but you may find one helpful.
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It sounds like someone would have to file for guardianship. However the Hospital might already have filed so check it out (if my memory serves they have to file if they keep someone involuntarily over 3 days).
However, your sister holding the POA may have preference to be appointed guardian. You will most likely need an attorney to do it right.
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