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My mother in law has started progressing rapidly in recent months and her memory issues and paranoia are almost constant now. She told her friend her husband was abusive (which is not true) so she took her to the bank and then to an attorney and she filed for a divorce. They don’t have the money for this in the first place and I am frustrated that her friend can’t see it and the attorney couldn’t see it.

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I think you and your husband need to have a talk with this "friend" as well as the people at the bank plus the attorney. If no one has durable POA for her, then someone needs to file for emergency guardianship.
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If your MILs friend is also in Texas, then a divorce is pretty simple there. I see that said that the divorce was FILED last week, not FINALIZED. So if in fact she did file for divorce, it won’t be finalized for at least 61 days as Texas has a mandatory 60 day wait period. The soonest you can be divorced is 61 days after filing. My FIL has married AND divorced 2-3 times in Texas (and once in CA).
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I don't feel she is divorced at this point. There maybe a filing but it takes a few months for an actual divorce and a Court hearing. There has to be a dividing of assets. Here in NJ anyway.
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You might want to check the public divorce records to see whether your Mother-In-Law actually filed for divorce or not. 

According to Vaught Law Firm in Austin, TX website:
https://www.austindivorcelawyer.com/how-to-find-divorce-records-in-texas/

"How to Find Divorce Records in Texas"

Divorce records in Texas are public, which means anyone can access them simply by following a few steps. These steps apply regardless of whether you want to access a public divorce record from home or in person.

What You Need--To access a Texas public divorce record you will need information such as:

•the full name of the person

•the date and place of divorce

•the relationship with the person

•the type of order

•the reason for wanting the information

*Extra Tip: If you do not know the county in which the divorce decree was issued, you can contact the state office.

Access a Certified Copy at the District Clerk’s Office:       Parties of the divorce can visit the Office of the District Clerk. Be aware that since certified copies of divorce decrees are only available in person, you will need to visit the district clerk in the county or district where the divorce was filed.

Visit the Texas Vital Statistics Unit Website for a Verification Letter:        The Texas Vital Statistics Unit provides verification letters, but these letters are not considered to be a legal substitute for an actual divorce decree. Make sure you understand the intended use of the divorce decree. What is its intended use, and will a verification letter satisfy that need?

Visit the Texas Vital Statistics Unit, where staff will provide you with a letter verifying whether the divorce was legally recorded with the State of Texas based on the application for divorce filed by the county or district clerk.

Here, verification letters for divorce decrees are only available for divorces that were filed from 1968 to the present.

You can also search through indexes of divorce records sorted by year. These records may be purchased or downloaded for free from their easy-to-use website. Their website also allows you to request verifications of divorce decrees online or by mail.

 Search Texas Public Records Online:       In today’s digital age, a lot of information can be found from visiting various websites and archives simply by searching “Texas divorce records.” County websites in Texas provide access to all public records.

One website in particular, Texas Divorce Records, will allow you to search records using the names of the parties involved, but like the Vital Statistics Unit, it only contains data from 1968 to the present.

If you need assistance tracking down your divorce records, or discussing the terms of an upcoming divorce, contact the Vaught Law Firm for reliable family law counsel.

Category: DivorceBy Jimmy VaughtOctober 17, 2016
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Milneedshelo, can I ask who told you that your Mom-in-law went to an attorney to file for a divorce? If it was your Mom-in-law who said this, then it could be her dementia talking, and with dementia it is common for one to tell stories that aren't true.

Why I had asked, a good Attorney is trained to spot a person who has memory issues, thus will not allow that person to continue with the legal request. If Mom-in-law was able to keep her wits about her at the appointment, then any work the Attorney has done needs to be paid.

Same with the bank, most employees would be questioning a person trying to withdraw money if the person appeared confused.
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If there is a POA in place, Dad may want to tell the bank that Mom can no longer have access. Credit cards too. I wouldn't remove her name because of Medicaid, if needed in the future. Just see if a flag can be put on the account.
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Get a letter from her doctor stating she is incapacitated and unable to make these decisions. Does she have POA, DNR, Last Wishes in place?
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will he have to return the money?
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JoAnn29 Feb 2019
Not sure if he would have to. He did do some work. All you can do is try. Like suggested, have a letter from her doctor. If she just paid for the filing at this point, may not get it back.
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It can be revoked. Just explain to the lawyer she is not competent to sign papers.
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rovana Feb 2019
Has she formally been declared incompetent?  Seems like, in general, actual incompetence can long precede the formal declaration (and cause all kinds of trouble).
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