Erm, isn't this fraud by deception?
Absolutley... but will the mother want the stress and further animosity?
Assuming the remainder of the estate is worth in excess of 300k, then the path of least resistance it to re-write the will in favour of the OP, cutting the sister out and calling it a day.
But, we're assuming there won't be substantial care fees at the end... your're looking at a minimum £700 per week for care home fees, and that's at the very cheapest end, so it can into the estate very fast, whilst the sister is sitting pretty in her 300k house with her 10k hierloom.
It's a right old mess, to be sure! but at least now the OP knows what's what and can hopefully address things.
EDIT, in fact, the best thing to do, would be for the OP and his mum to make an appointment with a 'wills & probate' solicitor (most if not all will do a free consultation and you might end up paying £300-£500 for a new will), lay the cards on the table, warts and all, and see what advice they can give. This is really critical, as a properly written & witnessed will, will be water tight.
For example, a clause could be inserted specifically saying why the sister gets nothing, due to xxxxx), then it will not be open to legal challenge from the sister during probate.