@LadyJanestar Your DM died & her will (?) left her estate of £34k to her DH/your Dad or did she die without a will & by default her estate of £34k went to her DH/your Dad?
Either way, your DM did not state in her will that her daughters were to be beneficiaries, have I got that right?
Then your DF dies & his estate leaves £17k to your h-s which came from your mum, which he did not have to do, & the rest of his estate went to you, have I got that right?
Lastly but by no means least, your Gran (assume that she is your dad’s mother & has no bio link to your h-s, leaves you another sum of money, have I got that right?
Firstly, my condolences for your recent losses, to loose some many people dear to you so quickly is very sad.
With all that loss it’s understandable that it’s important to acknowledge that you have fears of acting in such a way that you may loose more people dear to you through estrangement - hence the dilemmas.
Your h-s has also lost her mother & the bond she had with your father has not been proven after his death by inheritance. Here’s the rub.
Inheritances are not about being nice or being fair, nor is it a satisfactory way of proving preferences or settling scores, yet people persist in doing it. It is a legal way & tax efficient way of handing on family assets to the next generation. If you were to look at the hierarchical distributions of assets laid out in UK Intestacy law you will find the close blood family are up the top of the table & ranked, & then non-bio, non-adopted children are down the listing & can make a claim. My point being that your father was not your h-s’s bio father nor did he legally adopt her. So he was kind & loving to her but he did not legalise the relationship.
To unpick this - & I do so to make this logical - you mum did not directly provide for you or your sister in her will, she left everything to her DH, your father. You father fairly (& under no legal obligation) & deliberately in his own will made a consideration £17k equivalent to half your mother’s estate to your h-s & then he left the residue of his own estate (which included the nominal £17k from your DM) to you, his own child. Your father had no legal or moral obligation to leave his own money to your h-s, & as I said he was generous to your h-s.
Your Gran who has no biological connection (?) to your h-s was under no obligation morally or legal to your h-s & her will reflected that.
That’s the bare bones logic, then wrap that up in the uncertainties of your h-s’s life choices so far. Each of your DM, DH & DG could have taken advice, when they wrote theirs wills, about setting up a Trust type arrangement to leave something ringfenced to your h-s, but they chose not to do that.
Bluntly, your h-s is fortunate that your DH was thoughtful when he wrote his will. He had no wish to leave your h-s any more than the nominal equivalent of half of his wife’s estate.
If your h-s did has sought legal advice, it is highly likely that once the case is understood she has been advised that she does not have a legal case.
Let the dust of your bereavements settle a while & If you strongly feel compelled to do something, then set up a small investment fund for your h-s’s children. Howabout splitting in half the nominal £17k from your DM that got rolled into your Dad’s estate, say £8.5k & putting that into a fund for h-s’s children. That is generous.