I am the durable POA for my mom's trust and she is mentally incompetent.

YES.
See an attorney or file with APS.
This is elder fraud.

Yes that is elder abuse and as long as you have the medical certificate stating the diagnosis it is illegal at this point to have a new POA appointed - have your lawyer inform her lawyer or her of the medical certificate with the diagnosis .

How did you find this out? Did your sister herself inform you of this? Did she explain what she was doing & why?

It may not be relevant, but does Mom live with either or you?

Since your mom is mentally incompetent to make any decision on her own, she cannot give your sister POA. For someone to give POA to another, they must be of sound mind. If this attorney that your sister is using to make this new POA is aware of your mother’s incompetence and he still goes ahead and draw up the POA then he is at risk of disbarment. Perhaps you should call your sister’s attorney and make him aware that you have documentation showing your mother’s incompetence.

Speak to an elder law attorney about this matter immediately especially since you have documentation showing your mother’s incompetence.

Have your attorney phone the new attorney.