My husband's stepfather recently went to another town to have a Living Trust written up in his name only and had his wife, who has Alzheimer's Disease, sign papers to sign all of their assets over to the trust. I know this is not legal and will not stand up in a court, but now we are potentially facing a huge and expensive legal battle to gain conservatorship of mother with Alzheimer's and her part of the community assets that should be available for her care. What would you do? We have just been told by an attorney that we were working with that we need to come up with a 25k retainer to fight all of this. The mother was also moved out of an assisted living facility to save money and then ended up in the hospital with dehydration. While she was hospitalized with this, they found a tumor on her kidney. I think the step father is also exhibiting signs of early dementia through this weird financial obsession.
You also apparently have enough contact to have described stepfather as having a "financial obsession through this" and that he, too, may be exhibiting signs of dementia.
If you have this much intimacy with current circumstances it leads me to believe you have conversational contact with him which means, in turn, that you have an opening to address this with him.
Have you asked him about money? Maybe he was scared. Most couples dealing with this are financially terrorized. Maybe he thought he was doing the right thing. Maybe he got bad advice. Who knows. But if you haven't, you should ask him.
Also keep in mind that if he is keeping her home without help he is overwhelmed and is going to need help. Can you take a non-adversial position with him and offer help?
I would also want to know if you have a copy of the documents that were replaced and if you know the name of the attorney that did the new drafts. If you have the previous documents and the attorney's name I would get a letter of your mother's incompetency from two physicians and make an appointment to see the new attorney. Tell the receptionist you are making an initial consultation appointment for your own family...which you are...but don't spill your guts about the situation or he may not see you.
No attorney will want to have participated in a fraudlent matter and he may work with you to make things right.
Keep in mind that the existing documents probably named stepfather succesor trustee in the event of mom's incompetency and similarly granted him Power of Attorney over mom as well and he may, therefore, have in fact operated within his power and duty.
Regardless, whether or not mom is being properly taken care of is another matter entirely. If you cannot reason with stepfather you always have the option of calling the equivalent of Adult Protective Services in your county.
This option will pave the way for a low cost alternative to the legal wrangling you would have to go through with stepfather. If Protective Services finds mom unsafe and stepfather unable to care for her they will place her and file for guardianship.
As next of kin your husband (presumably?) will be permitted access to her and input as to her care. He can then be party to the state's guardianship action and petition to be named her guardian. Chances are the court would grant such a motion.
Of course all of this may, unfortunately, be moot as a result of the cancer. Mom will probably require long-term skilled nursing care sooner rather than later and she will easily qualify for Medicaid.