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Does your grandad have capacity to make his own decisions? Does your mother have power of attorney from him?
That in fact is good news because already you have a doctor who says that your grandad is fine to make his own decisions. What you do now is get grandad to send a letter saying that he has made his own decisions and is capable of doing so. He should also meet with his solicitor and explain that he wants to help his grandchildren. Just a general chat with the lawyer who can then note the conversation and that your grandad is well capable of making his own decisions. Your mother should at the same time refute the allegations made and threaten proceedings for slander/defamation is he persists. Sometimes you have to fight fire with fire and I hope this helps. Please leave a positive rating so that I am credited for my time.
You are very welcome. I hope you get this sorted.