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I visited my 91 yr old mother-in-law last March to check on her care,complete the sale of some of her property, put the proceeds in the bank and help her buy a better car.
My MIL is frail and she does forget things, but she eats well, sleeps well,recites her bible devotions every morning and discusses things that interest her like property, cars and family. she has a full-time caregiver who treats her like a sister.
During my visit, I questioned a niece about her handling of my mother's checking account and other minor obligations. She called a few days later to say she was coming by to visit and showed up with a psychiatrist from the county. He talked to my MIL for a few minutes and left. She is now petitioning the courts to have my MIL declared incompetent and her made her guardian. The hearing is set for May.
There has been no abuse of any kind in the home and no provocations calling for an ambush exam.
Were my MIL's rights to privacy violated?

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Have you spoken to the niece? Who is MIL's POA? How is caregiver being paid and who supervises her? Is the niece involved day to day? Are you, or is your spouse? How did you become aware of the petition?
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In most jurisdictions, a judge must order that exam. So the niece must have petitioned for someone to examine MIL. It's not like the niece invited a psychiatrist friend over for tea; this must have been court ordered, yes?
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Thank you for your replies. In answer to your questions about the niece. She has a POA for her grandmother's health. It was given to her because of proximity. She has a husband, three kids under 10, a job and another ailing grand parent. There is a full-time caregiver in the house, so my MIL is a lower priority for her. She shows up for emergencies. I have read her POA. It involves only end of life decisions. She did not bring this psychiatrist over for anything like that. She brought him there several days after we questioned her handling my MIL's checking account. There was no court order for an examination. The psychiatrist's visit lasted just a few minutes and he told my MIL that he felt he shouldn't be there. It makes me wonder if the niece told us one thing to let them in the house and the psychiatrist something different to get him out there. That is why I am wondering about a violation of my MIL's rights to privacy. As for the caregiver, he is paid by my MIL's health insurance.
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So why are you concerned about whether her privacy was violated (imho, it was). There is a petition for guardianship and if you are interested in opposing that, MIL needs a lawyer, either to argue that she's competent , or to argue that someone else be appointed guardian. If niece only has health poa, what is she doing with the check book?
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