If you suspect a vulnerable person is being used or abused, do please call the authorities.
If the sister is executor of the parents estate, a guardian ad litem (or something) could be assigned to look after her interests, both daily issues and financial. I have a friend who is marginally disabled and depends a lot on her sisters (who are good women), but if they were not so good, it would be really easy to take advantage in more than one way. She isn't a stupid person and her intelligence is not THAT low, she has minor physical limitations, but the way all things shake out with her, she is very vulnerable because of oxygen deprivation at birth.
Do be a good neighbor. And go to more than one resource if you need to. It might be that sister just needs to know shes on the radar to clean up her act. Get your neighbor on a couple of radars.