Help help help. I finally accused my mother of being crazy.

If she is in Independent Living can you have a meeting with the Director and talk about the situation? Suggest a move to Assisted Living without making a big deal of it. Possible, if it is a matter of locations in the facility tell her that they are going to "renovate the room she is in and she will have to relocate to another room. Move all her things into the AL room. If she asks to go back to her old room tell her that it is not done yet, they found problems and she has to stay where she is.
repeat when you have to move her to Memory Care if you have to.

A side note if the Hallucinations are new or more common you might want to schedule a visit with her Doctor to discuss this and the anxiety that goes with it. The hallucinations might be an indication of other problems.

I saw this with my grandmother and then my mother. All you can do is ignore it and change the subject. Sometimes that is due to a UTI but if she doesn’t have one, her mind is just getting worse especially at her advanced age. My mother is in a skilled nursing facility now. It is impossible to converse with them when they get like that and they are worse some days than others. Just part of the dreaded dementia is my best guess. My grandmother accused everybody in the family of stealing from her and we were all upset at first until the doctor said do not argue with her. She had diabetes and was on meds and 86 years old. We ignored it and changed the subject and that alone kept everybody from stressing out. You will understand this after a while. It took a little while for us to learn to smile and move on to a different subject. All you can do. Good luck.

I can so relate. Have just moved my mother in with me about a month ago. She is 93, beginnings of dementia and so difficult. She will push my buttons until she knows I will speak up and say something back. I don’t like to be involved in a heated discussion but I’m only human.
Give yourself a break. She won’t remember. She will scream at me one minute and everything is ok the next.
I cannot afford to put her into a nursing home, like most people say just put her in a home. It’s not always possible.
When you know you are doing all you can then give yourself credit for doing that.

Several things to realize:

1 - she might not remember - THEN IGNORE THE WHOLE SITUATION - if she can't remember a confrontation like that she needs to be supervised 100% of time

2 - people who see things can be a danger to themselves & others - make sure there are no guns etc that she can get hold of - she may try to 'fix' her problem with BIL by shooting him - or do something to start a fire etc

3 - she needs to be cared for by professionals A.S.A.P. - some meds may help

4 - if mom is 94 then you are probably in your 60's or older - this is a lot at this age - I'm 69 taking care of 92 year old mom who is in an NH - so start looking at you, hubby, BIL, etc - what are all those health issues + mom=stress - that is probably bad overview - get mom secured in an appropriate facility now to relieve the stress on the rest of you