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A judge's primary concern is always the emotional and physical safety of a child. The standard for custody is the best interest of the child. If you have concerns over mother's potential use of drugs I would suggest requesting a nail test. This goes back for lease 6 months and is the most difficult to falsify. If a nail tech is unavailable you should ask for a hair follicle. This is the next best. I would anticipate that mother is going to argue her problems lie in her past and that she is beyond these issues. You need to try to establish through your testimony that the past problems remain current problems based on your knowledge of the situation. You must be careful basing your knowledge upon what the child told youas this could be hearsay evidence. If you have the opportunity to see or hear any of mother's disturbing conduct first hand that is what you should in your testimony.
I would also stress that you are maternal relatives and have no stake in the outcome of the case other than the child's best interest. Try to be specific with the behavior mother has exhibited and you have witnessed overtime and is continuing to happen to this day. Also stress the mother's decision to have another child is an example of her ongoing poor choices and that this decision will not reduce her stress factors or make her more available for the needs of your grandson but less available.
I would also suggest that a request be made to the court that a guardian ad litem be appointed on behalf of the child. This is an attorney that would represent the child not either of the parents. What is good about a guardian ad litem is that they can perform their own investigation, interview the child, interview grandparents, family members, teachers, doctors, etc. Finally, I would argue that mother ready for visitation as her housing situation is not steady. The child should be placed in counseling and the input of the counselor after sufficient sessions should be weighed by the court to determine if it's in the child's best interest to have unsupervised visitation. Mother is just not ready. She needs to get her house in order in order to provide a consistent and stable relationship with her son, rather than placing him on an emotional rollercoaster of highs and lows. I hope this information is helpful for you and wish you the best of luck in this difficult situation.