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My FIL has dementia, his POA is my sister in law, but her other sister somehow got him to sign a new POA after he was diagnosed.

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Thank you
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Jim, I was editing my post when you wrote.   I have added some more information to my posting above.
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He's had it for a few years now,and he is easily confused
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A person can have Dementia and still be able to understand a legal document, if the Dementia is in the very early stages. 

I assume this legal document was created and signed in a law office.   It is up to the Attorney to decide if father-in-law is still capable of signing. 

If the Power of Attorney was created from an on-line document, and friends were witnesses, along with a Notary, then it might be questionable.  It depends on the doctor's note as to how far advance is the Dementia, if advanced at all.  If the Dementia was to a point where father-in-law couldn't understand what he was signing, then the date of POA and the date of doctor's report would come into play.
You would need to see an Elder Law Attorney to see how to proceed. 
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