So you have a lawyer and shrink who disagree, who is right?

Maybe both of them are right. The lawyer knows the law. The shrink knows other things.
Could be she was 'showtiming' for the psychiatrist which is common when around doctors and other healthcare professionals.
The shrink will have to write an assessment stating that in their professional opinion the person is competent or not. Then that has to go with you to the lawyer she had previously or to a different one.
Your best bet would probably be to speak with someone in the probate court where Dirty lives. They appoint lawyers for people who are incompetent to get conservatorship, guardianship, or POA over them or to get a relative who is willing and suitable to take it. The lawyers they use are associated with the probate court so they don't have any fears about liability when they take the person's case before the judge. Give the probate court a call on this one. They will help you or will put you in touch with the right people who can help you.

Lawyer wins when it involves legal work. There is no way an examining lawyer will do paperwork for a person he/she feels is incompetent in any way.
I would try several lawyers. If she fails all two or three, then she is likely not competent to make her own decisions. There is more involved with Lawyer paperwork than there is with shrink. You can be competent enough to know to turn off the stove while still not competent enough to understand what is involved in a POA. A DNR is pretty cut and dry. If you die do you want us to try to bring you back by beating on your chest and putting a breathing tube down. Or should we just leave you dead?
A Lawyer has to be assured that the person fully understands what she is doing.
For instance, when my brother assigned me as his POA and his Trustee of Trust he basically said flat out "I need to know that you understand that you have basically given your Sister all rights to manage all finances for you; she can literally sell the gold out of your teeth". It made the point very clearly.
I know you to be really bright. Do you believe G. is fully able to make her own decisions? Has she had testing for dementia? What did it show? We know she has done some dingbatty things, but whether they were done because she is losing it a bit, or because she is a bit mean and manipulative is something you would be able to guess better than we can.
What did her paperwork from neuro-psych docs say in past?

So, here is a little backstory. She has not seen any doctors or a Medicaid Nurse or SW since Feb 2020. Without seeing her, the PCP put her a PD psychosis drug, CVS is the only place you can get it here and it goes through a online pharmacy in PA. The CVS pharmacist thought it was odd that a neurologist did not prescribe it, a PCP did and all meds are from the same dr.

BCBS of MI came to the house to discuss meds and there was a concern that there is no neurologist, cardiologist or pain mgmt specialist. Dirty, son and BCBS sent a MyChart message to PCP asking for a referral, the message back was the dr. says no referrals.

So, when she went to the hospital, the hospital dr referred to a psychiatrist. So, the Nurse Practitioner of the PCP interruped and changed it to the psychiatrist they use who said she was competent, she is not. They blocked all referrals again except to wound care.

The lawyers say she isnt competent and sis' lawyer thinks dr is getting kickbacks. BCBS thinks it is all odd. She was supposed to do an after hospital follow up tomorrow, in person, dr cancelled it for a phone call.

So there are no referrals for competency and lawyers say they cant do anything without a diagnosis. Cannot change dr without POA.

Being competent to make legal decisions is completely different than a shrink saying she is competent. The attorney should have asked her questions, when alone with her, about what a POA is, what they do, whether she wants to assign POA and if she is doing it willingly. If she is not clear with her answers she is not competent to enter into a legal agreement.

No attorney is required to do work for someone they don't feel is competent. He isn't making a medical diagnosis, but he is allowed to refuse.

When my dad was diagnosed with terminal cancer, he contacted his attorney to resign from his trust and hand his affairs over to me. He also wanted to make a change in the trust to leave money to the grandchildren, but the attorney refused to do that part. He felt my dad was not competent to make that decision after having just been told he was dying, and although he clearly competent, the attorney knew that snap decisions like these were a good idea at such a time. I agreed completely with the attorney, and handled his wishes as his Trustee instead.

Shouldn't a medical MD be involved in testing her? Like a neurologist, gerontologist... someone who is regularly practiced at identifying dementia?

"While dementia does affect mental health, it is not a mental illness, but rather a disorder of the brain.." (source: https://www.asccare.com/mental-illness-vs-dementia-elderly/)

Therefore, the purview of a medical MD, not a psychiatrist/psychologist? When people pursue guardianship in court and have to prove competency of someone to a judge, who does the judge consider as an "expert" regarding a diagnosis? Or do they just rely on "evidence"?(I'm asking -- I don't know).

Thank you, the Mental Capacity Acts, I just looked up are British and Commonwealth Laws that do not apply in the US.

So I have a lawyer, sis in Germany has a elder lawyer/boyfriend, I guess is the polite term. Andrew, boyfriend/lawyer, told me I hired the largest most expensive firm in the state. So, after my firm's meeting on Friday, he visited today as a "friend." That lasted maybe 30 min. before he flipped, worse than I do about it all

So he is even saying there is no competence. The PCP has not seen her since Covid started and will not recommend a neurologist which I have been pushing for for months.

Can a lawyer go against a shrink diagnosis?

They can both be right, you know.

The Mental Capacity Act says that a person is unable to make a particular decision if they cannot do one or more of the following four things. • Understand information given to them. • Retain that information long enough to be able to make the decision. • Weigh up the information available to make the decision. • Communicate their decision - this could be by talking, using sign language or even simple muscle movements such as blinking an eye or squeezing a hand.

But actually the key phrase there is "make a particular decision" and therein lies the rub. Mental capacity, or legal competence, is assessed in context. So the shrink can decide that the person is perfectly able to understand her admission, treatment and discharge; whereas the lawyer, however many days later, can in equally good faith not be at all happy that this client has the ability to create a POA.

Does the person herself wish to appoint someone to act for her? Does she have clear preferences of her own when it comes to resuscitation (or any other form of treatment)? - 'cos you don't actually need a lawyer for these.

Dirty may have been able to show time with the phychitrist. With the lawyer not so much. I would have gone to a neurologist.

Sorry if u have already posted a reply, I try to keep up, but where you able to get the problems out of your house?