Based on the facts in your question, you are not liable or vulnerable to criminal charges because of acceptance of funds from your mother despite being the attorney-in-fact on a POA. It is not clear why your mother, who has some degree of dementia, is the "plaintiff." Unless it can be shown that you misused your POA authority to gain funds contrary to the wishes of your mother, your liability would appear minimal. Discussing some settlement may be in your interest; however, if the mental capacity of your mother is an issue, you may want to introduce this issue because, if she is mentally incapacitated, she should not be a plaintiff, even if your sister is the co-plaintiff or real force behind the action.