My mother-in-law is asking my adult children for money. How can they say no to grandma?

An adult grand-child needs to determine their own behavior and responses (to grand-ma and others). This seems to be an issue for your husband (since it is his mother) and not you. I would recommend you look at why you want to get involved. APS doesn't make any sense (to me) since grandma is asking-getting money, she is not being abused. Others are ALLOWING themselves to be taken advantage of - if they feel this is what is happening. The focus needs to be on the adult grand-kids and they need to make their own decisions. It is 'often' pointless to TRY to change the behavior of someone with dementia and/or a history of seeing their self as a "victim" or for whatever reasons enacting manipulating behavior - now with a layer of dementia (if this is the situation). This is not your problem. Let it go anyway you can - for your own health and well-being. Don't let her drag you down. Focus on yourself and what makes you feel good.

Just say no in a calm voice (as possible) If she still wants to accuse BIL, suggest that all the family come together for a meeting including BIL and discuss the problem openly. Explain to her that she has to live within her budget. More than likely she will say no to that. Or if she is passive aggressive she will go along with that and turn to others to borrow money. More than likely she may have no concept of exactly how much it takes to. Their head may be in the 1950's prices or may not even care as long as she wants it and when she wants it. As time marches on this problem can get worse and she will need to be put in a facility.

What would worry me most is any false accusations against BIL. All too often people let this kind of thing just go, but others, not knowing the truth, take accusations to be accurate. Then trouble.