How do l deal with my mom's hallucinations?

Your sister and nephew are in denial and your mom needs to be seen by a doctor, probably a neurologist.

I agree with that you can't argue a person out of a hallucination. It's their reality.

My brother had a bad motor cycle accident a number years ago...Hospitalized 18 days 11 ribs out of 12 were broken, tubes in and out of body...He asked if I saw the movie playing on the ceiling. I said no.. He said it was just for him to see.... It was cool to him... Wish he was around...his last couple of years he could express himself with laughter and gestures,... He was too young for care facilities, and too young to pass, I really do miss him... He had a great sense of humor for which I thank him...Visiting was depressing, but fun as he thoroughly enjoyed company and family.......You get where I am going. Life is short, make your MOm happy, don't worry about hallucinations,... find a way....I'm done...Good luck...Take care....It is okay to feel your way...It sounds like a new chapter for you.....

Hey Mom, maybe they just want to hear some music!! OR....Mom, tell them thank you for the visit , but now my kids are here and I want to visit with them...

In other words, DO NOT FIGHT IT...She can't help it. In her eyes, your father was there.....Just say "Mom, we smiled at each other"" Dad knows we love him. Play her favorite music. Music does something to the soul....... Find her era of music, musical plays, whatever she likes. Get a little CD PLAYER, and give her music and sound.... It does wonders. !!!! Sound of Music, My Fair Lady, Go on Amazon or Best Buy.....GoodWill.....doesn't matter find her music to listen to. Just Push Play... I find Musicals are great. I got mom a Cinderella musical CD. It is cute and entertaining. ASK HER what she likes to listen to.

My FIL was on "Diloded", don't know how to spell it, but it was after a surgery. He saw things... He was afraid of the lady with no teeth. Friend's Mom (94) says things all the time, but she has a sense of humor, and I just go along with it, and agree with her, "What's that person doing?" Or , "Where is my car? Did he put it in the garage?"
My mom doesn't speak much any more, so appreciate when she speaks. You will miss it later.....Trust me. If there is no "medical" issues that are causing this, .. and this is hard for me to relay....Accept it......It may be a part of dementia...Like my mom, so when I hear her say something now, I feel good. It's nice to hear her voice.....Just wished I didn't disagree on the name she called me... I asked her what my name was, and she said her sister's name.. That was the last time she ever said a name... I love her, and see her often...but no conversation... That is SAD..So if it is not hurting anyone, please don't argue. And if she asks about not saying anything to your dad, just say something like "we winked at each other" or a special signal that we have, white lie......I did when he was in the hall...We smiled at eachother when he walked by.. Mom, he looked happy to see us.....It sounds like she might be older than 80... It is hard...I wish Mom could speak more, she only says -okay..