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You cannot unilaterally transfer the powers granted to you under a power of attorney. If someone else is named as an alternative POA, you may transfer the powers to that person. However, only your sister-in-law can grant someone else rights under the POA.
You may want to discuss the situation with your sister-in-law's medical provider, etc. Not everyone with dementia lacks the competency to execute a POA. She may be able to execute a new POA naming her son as Attorney.
The other option, if you no longer wish to act in the capacity under the POA is for your nephew to petition the court to name his as a guardian or conservator of your sister-in-law's person and property. These action can be somewhat expensive, however, and should be pursued only as a last resort.
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