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My situation is unique and complicated, and I’m having difficulty finding any meaningful input as to how to address it.
In 2021, my brother-in-law and father-in-law both passed away within 6 months of each other. My mother-in-law’s health took a turn for the worst shortly thereafter. She lived in Louisiana, and we live in Georgia. After the doctors in LA told us we needed to put her in hospice, my wife convinced her to move to Atlanta and see if the medical care there would be anymore beneficial. After much convincing, she agreed, although she did not want to be in an assisted living facility. She used the proceeds from her husband’s insurance to buy a house in Atlanta, and my wife and I sold our house so that we could move in and care for her. At the time these decisions were made, my mother-in-law was near death. Our goal was to get her to Atlanta and get her proper medical care.
We had to use the money we made from the sale of our home to modify and make the new home handicap accessible. The new house is deeded to my mother-in-law, but it was placed in a trust so that it would go to us after she passed. My wife was saddled with the responsibility of dealing with my mother-in-law’s finances and healthcare, all while holding down a full time job and caring for my son. I helped her in every way I could, but the process nearly broke her.
My mother-in-law moved into the new house in April of 2022, and immediately she started getting better. By the end of the year, she was healthier than at anytime I had ever known her.
This is when the problems really started.
As she got better, she became more demanding and critical of my wife. It was a side that I had never seen, and I probably would not have agreed to live with her had I known. While it was annoying and aggravating at times, we learned to deal with it. She was healthy and alive, which was the important thing.
We began noticing changes in her personality towards the end of 2023, and tensions were rising in the house. In January of 2024, she declared she was moving back to Louisiana and she was selling the house we were living in. She accused my wife and I of stealing her money and abusing her, all completely false allegations. Within 2 weeks, she had contacted a moving company and moved out of the house, back to the house she still owns in Louisiana.
When she left, my wife was her POA and in full control of her finances. My mother-in-law never paid a bill in her life, only spent the money that my father-in-law made. When my mother-in-law moved out, my wife patiently tried to explain the bill paying structure that had been established, but she didn’t want to hear it. She was convinced we were stealing money from her account, not paying her bills. She revoked the power of attorney, and told us she was writing us out of her will.
Although she has been historically narcissistic, her erratic behavior has us thinking dementia may now be in play. She regularly sends us nasty texts and leaves rage filled voicemails. We don’t engage with her, only replying with a simple “I love you.” She has most recently said that we are both “going to hell”, that we are unfit parents who should have our 10 year old removed from the home, and that I am a bum that should be in jail. She has also physically injured a relative after she mentioned my wife’s name, gripping her arm so tightly it left a bruise. She has said she is leaving nothing in the will for my son, and is once again threatening to sell the house out from under us. Had we known any of this was remotely possible, we would have made different decisions regarding her care. The house is too expensive to buy from her, and any down payment we would have is already in the house. We’re trying to figure out where to go for advice for our odd situation, and if there is anything we can do to protect ourselves. Any suggestions would be greatly appreciated.
Apologies for the long tale.

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Actually this scenario is not uncommon. All this let's all move in together and be one big happy family doesn't work.

I would immediately go to an elder law attorney. Bring all your documentation, I hope that you and she signed a binding contract in regard to who pays for what.

She has you over the barrel because she is the sole owner of the house, a will can be revised at any time. A trust, well it depends on the type it is. However, she can sell the house anytime she pleases.

The protect yourself should have been done in the beginning, now it is about trying to salvage whatever you can.

Don't hesitate jump on this now. Good Luck!
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An issue is that your wife was managing her finances while MIL did not have diagnosis of incapacity and therefore your wife's PoA was probably not legally active, unless it is a durable PoA. I'm sorry that this is such a hot mess when you were meaning to do good. MIL's paranoia is very ramped up and can indeed be a symptom of dementia, as well as her confusion and inability to manage her finances -- but now you'll probably never know what's going on with her. It may turn out that she does make it to a lawyer who assesses her as still having "capacity" to change her PoA, Will, etc. Many a senior makes this threat but never carry it out because it requires executive functioning, clear thinking and a good memory -- things she seems to now be lacking. It also costs a lot of money. I agree that you should take this chaos to a certified elder law attorney to unwind it. You need to do what protects you and your wife in a worst-case scenario, which would be she accuses you of financial abuse/theft and hires an attorney to pursue it. But maybe all she's capable of is raging. Unless she somehow convinces some other sucker to help her she may never make good on her threats, but if she does get someone to help her -- and she makes them her new PoA -- then you may be in for trouble. I'd see an attorney without delay. So sorry that "no good deed goes unpunished" in life sometimes. I wish you a good outcome and peace in your hearts as you protect yourselves.
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Let that be a lesson for whomever else out there is thinking of selling their home, move in with a sketchy "dying" person, and then invest the money from the sales of their house into a home they don't own.

Sorry some things can't be fixed.
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You do need to get your documation in order. The sale of your house. Proceeds you received, receipts on what you paid out of pocket for renovations. If she can sell the house, maybe you can place a lien on it for the money you put out. As said, depends on the trust and how its written. You also need records of how you used her money as POA. Did you help with utilities, etc.

Maybe its not Dementia but a Mental disorder. You need a lawyer.
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It is a long tale, but basically in all the very bad decisions made all along the way, this stands out; you say to us the following:

"She accused my wife and I of stealing her money and abusing her, all completely false allegations. Within 2 weeks, she had contacted a moving company and moved out of the house, back to the house she still owns in Louisiana.
When she left, my wife was her POA and in full control of her finances. My mother-in-law never paid a bill in her life, only spent the money that my father-in-law made."

Taking paragraph TWO of the above first, you say your wife was her POA and in full control of her finances.
THEN
You say that within two weeks this woman, with no control of her own finances, contacted a moving company and moved out.

I am so confused:
1. If she WAS COMPETENT why was wife managing her finances.?
2. If her finances were not in her control how did she contract a moving company let alone ALL THE REST OF IT--the move, the new home, and etc.

The long and short of this wild ride here, which was taken some time ago and mistake upon mistake piled on, is that all deeds, all POA papers, all files and records over time need now to go with wife and yourself to an EXCELLENT attorney who is going to make a tidy fee off of you, and who will hopefully have options for the way forward. This is, I know you understand, a pretty awful mess. I am really very worried for you. But the one certain thing is that you need EXPERT LEGAL GUIDANCE now, not the opinion of an old bat like me.

Good luck, bwright, and I sure hope you update us on what sounds like a podcast that would make multiple fascinating episodes. Golly, I bet that's no comfort at all here. I am so very sorry all of this has occurred, but if I say one thing over and over and over, and already said it twice today--with AgingCare, expect the unexpected.
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JoAnn29 Apr 10, 2025
"My mother-in-law never paid a bill in her life, only spent the money that my father-in-law made."

Seems MILs husband handled all the finances, she has no idea how to pay bills so daughter did it.
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I think you need a very good wills and estates lawyer to help sort this out for you.

For example, your MIL may not be legally able to sell the house, depending on whether it's a revocable or irrevocable trust, and how the trust is structured.

Her will is separate from the trust, and she can change that, if the lawyer she sees about changing it considers her to be competent to make changes. But for a lot of seniors the will is a weapon they use rhetorically to threaten family members, but don't ever actually do anything about.

There may also be tax consequences involved, since the house is still your primary residence but not your MIL's.

So get an excellent Atlanta based specialty lawyer, and be prepared to bring to your meeting with him or her with any documents you have, including bank and tax statements, deeds, the trust documents, etc. It will cost some money and time to unravel but will be worthwhile to protect yourselves in the long run and get some peace of mind. Just as you made an extra effort to get your MIL top medical care, get some top-quality legal assistance since this is complex.

Clearly your MIL has some form of dementia. I'm very sorry for you and your wife and son, that the situation devolved so badly after all you did for her, especially your wife. There are medications that could help calm your MIL and bring her distorted thinking more into reality, but you can't control her medical care, unfortunately.
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Wow, I’m sorry for all of it. You need expert legal advice for this, please see an estate/elder care attorney as soon as possible. Don’t waste time beating yourselves up over past decisions, just act now to guard your future. I wish you well in untangling this
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Do you have receipts for your money that you have put into the house ? Perhaps you should talk to a lawyer and see if you can have MIL pay you back, so you can move out ? Idk , just something to ask .

It sounds like your mother-in-law may have some form of dementia . If so , at some point something will happen to force a change with her living alone .
Does she drive ? How does she go to any doctor appts ? You could send a message to her primary doctor, explaining the change in behavior , and that you suspect dementia .

I’m sorry , this is a tough situation . Perhaps your mother in law will not be considered competent to change any trust papers ( regarding the home ) , however I don’t know if that would protect you from her evicting you . Definitely talk to a lawyer .
I’m sorry you are in limbo as far as current housing for you , your wife , and children .
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bwright75 Apr 10, 2025
I'm quite certain it is dementia, which is making her covert narcissism worse. Other family members have started taking notice of her erratic behavior, and are deeply concerned. Her threats and accusations grow wilder by the day. She leaves incoherent raging voice mails, claiming she's going to do all sorts of horrible things to us financially. She is also a pathological liar, and we have caught her in a number of them. She claims she's spoken to several lawyers, yet we have no proof of that. For the record, when we agreed to help her, my MIL was the complete opposite of how she is now. She was incredibly sweet and kind. Obviously, as a narcissist, she was able to put on a great show, and we fell for it. I never dreamed this could even be possible, and my wife and I are now left to regret every decision we made to help her. We are left stunned and confused.
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