It certainly looks bad, based on the facts that you presented. Someone acting under a POA must act in the best interests of the principal alone, and cannot act in their own best interest. Somehow, the wife would need to argue that the actions she took benefited your grandfather. That seems dubious. Unfortunately, there is no way for you to challenge these actions without going to court, which as you note, is not a pleasant prospect. If you are intent on pursuing this, you should contact a probate attorney as soon as possible. There are statutes of limitations on matters like this, and you have a limited time to act.
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Hello. I suggest that you ought to confer privately and at great length with an attorney at this time; she/he will provide you with legal counsel and guidance. Know that you face rigid time deadlines for any potential action, and there will come a time when it will all be 'too late'.
WILLS - TRUSTS LAW, PROBATE LAW