My father and sister both passed over 20 years ago. Mom seems to remember my sister passing but nowadays will say that she is waiting for my father to come and visit or question why hasn't he called, etc. At this point I always gently remind her that Dad passed away. She either suddenly remembers it or gets confused and is surprised ("Was I there? Was I at the funeral?"). She feels bad that she doesn't remember his passing but I tell her that he is simply thinking of her and that she is thinking of him. That calms her down. It is all part of this process of the mind falling part. I always tell her the truth because I don't want her to become fixated on the fact that he is going to visit or call. It would be an unfair dream to cling to and just cause her pain.
Oh yes, it is very sad the first time you get a statement like that. For me it was kind of stunning, and I didn’t know how to respond. What seemed to reassure Mom was telling her it must have been a very vivid dream. “Isn't that nice, they must be thinking about you.” If she would persist about someone who had passed away, I would tell her that So-and-so is no longer with us, but isn’t it wonderful to be able to think about them and call up their happy memory whenever we want to. She’d say “Oh yes” and then we’d move on. Try not to dwell on it, for both your sakes. Moving facilities just for this would be overkill and not fix it. You can’t, unless she has a UTI.
My mom's episodes of thinking my dad, who has passed, is still alive come and go. These days when she asks for him I have her checked for a UTI and she almost always has at least a mild one. The care givers and I go along with whatever she is thinking, but eventually she realizes that my dad is gone. This was a very gradual thing with her. For so many years she knew he was gone and how he died, then she knew he was gone, but not how he died (and I would stupidly tell her until I figured out she does not need to know), now off and on she doesn't know he died and asks where he is. I try to lead her deep into memories of long ago by reminding her of things they did together. She usually then forgets to ask where he is now. I find my own sadness of her situation lessening with this strategy of talking about him with her. Moving your Mother-in-law to a new facility might confuse her even more.
Ask her about the call - just be interested in it, don't interrogate her. See if the conversation that results can be used to reorient your MIL to the present day.
If your MIL is completely convinced that the phone rang and it was her mother calling and they had a lovely chat... let it go. Say neutral, cheerful things such as "I'm glad to hear you sounding so pleased" or "it must have been good to recollect her so well" - so you're not contradicting her, and you are pleased that she's enjoying clear impressions of the call (as long as she IS enjoying them!), but you're not reinforcing her mistaken belief.
If your MIL begins to "come to" and realise that there is something wrong about what she thinks happened, then you gently lead her back to the present day until she figures out for herself that this can't have happened as she thought it did. In that case it might be a comfort to her to talk about her mother and share a few real memories with you.
My 84-yr old MIL called me twice this weekend from her LTCF about "the funeral" for "the family member" (she thought her grandson has passed away and said my husband told her while they were "sitting at the table". None of this happened. I just reassured her that all the family members were alive and well and I just started giving her a happy update on everyone and I think she either forgot why she called or was satisfied with my answer. The other call was about how her son (my husband) made a mistake and put her in this "place" and then she went on about "the funeral" again (but this time she said a name I didn't recognize and told her as much without making her feel foolish or more confused - which is easier said than done). This is new behavior for her so I called the nursing lead and requested a check for UTI, just in case. In the past she has also forgotten her parents were deceased (even though there's a photo of them at a very advanced age right next to her) and that her own husband has been deceased for over 3 years. It's all hard and challenging. There's no right answers as to how to deal with it. Just working on maintaining peace in my heart over it all, wishing the same for you and everyone who deals with this.
My mom sometimes forgets that her parents passed away - her mother in 1980 and her father in 1988. She wants to buy them gifts, asks why she hasn't heard from them, wants to know where they live, etc. On other days, she knows they're gone. At first, I started to correct her and remind her they passed years ago, which would make her scowl or cry. Now I try to change the subject or distract her with something. When she swears that she has seen them recently, I tell her that she probably had a very vivid dream and that everyone has dreams like that, which makes it difficult sometimes to separate them from real life. That seems to reassure her.
If your MIL is completely convinced that the phone rang and it was her mother calling and they had a lovely chat... let it go. Say neutral, cheerful things such as "I'm glad to hear you sounding so pleased" or "it must have been good to recollect her so well" - so you're not contradicting her, and you are pleased that she's enjoying clear impressions of the call (as long as she IS enjoying them!), but you're not reinforcing her mistaken belief.
If your MIL begins to "come to" and realise that there is something wrong about what she thinks happened, then you gently lead her back to the present day until she figures out for herself that this can't have happened as she thought it did. In that case it might be a comfort to her to talk about her mother and share a few real memories with you.