It sounds like you are right to be concerned. Elder abuse, financial and otherwise, has become a nationwide epidemic. You may have several options, depending on what is available in Kentucky (I am not admitted to practice there). The first may be to contact Adult Protective Services, or a similar organization, and report your suspicions so that a court, county or perhaps state investigator can come out and investigate. Another option would be to pursue a conservatorship (which may be called a guardianship in Kentucky). These can be difficult, and can cause significant turmoil within a family, because in essence you will be asserting that your grandmother does not have capacity to manage her own affairs or to withstand undue influence of others (the long-lost cousin). Even though she has Alzheimers, that alone does not mean she lacks the capacity to manage her affairs -- dementia can be mild to severe, and tends to progress along a spectrum. But, if a conservator/guardian is appointed, then that person is the one responsible for managing your grandmother's affairs, which will protect her assets from predators seeking to take advantage of her.
You should consider contacting a local elder law attorney for assistance and guidance,
This general response is not intended to create an attorney-client relationship.
I agree with Tom, you need representation and I wonder if you don't already have it... You say that you're going to be going to court soon, so I'm guessing that you have an attorney helping you with these matters... that's the person you need to talk with...
Does your mother have a power of attorney drafted currently? This could offer her POA some limited ability to handle her financial affairs. However, without court approval of a person's diability it is very difficult to restrain a personal from exercising their free will, as stated above.
Check out this article from the Henderson County attorney's office: http://countyattorney.hendersonky.us/docs/pdf/guardianship.pdf
Legal Disclaimer: James A. Littlepage is licensed to practice law in Colorado, and as such, his answers to Avvo inquiries are based on his understanding of Colorado law only. His answers are for general information about perceived legal issues within this question only and no response to any posted inquiry should be deemed to extend any right of confidentiality between you and Mr. Littlepage, to constitute legal advice, or create an attorney/client or other contractual relationship. An attorney/client relationship is formed only by specific agreement including an evaluation of the specific legal problem and review of all the facts and documents at issue. We try to insure the accuracy of this information, but we cannot guarantee its accuracy. Laws change quickly, and the reader should always insure that legal information of any kind is up to date and accurate before relying on it. The reader should never assume that this information applies to his or her specific situation or constitutes legal advice. Therefore, please consult competent counsel that practices in the subject area in your jurisdiction and who is familiar with your specific facts and all of the circumstances.