What would you do? I can't be the cash cow any longer....

Update: MIL did not need our assistance at the end of November, which was a good thing for our own needs. We did give her money as her Christmas gift; the amount that we can usually plan for. She got money from other family as well. Had constructive discussion with SIL as well; apparently since the time of my conversation with MIL about her budget, she has been bad mouthing my husband and I behind our backs, saying she won't take a dime from us again. (Although she did accept her Christmas present!) Instead she has been getting money from other family and friends. Not sure if she's asking or they're offering or a little of both. I'm a little frustrated with this because its not solving anything, its just perpetuating the problem. As long as she can get money with no strings attached, she has no incentive to work at establishing a budget that is manageable. We've decided to give her no more money until she asks (SIL is supportive of this). I will check in with her at the end of each month to make sure she is ok with the important bills. If and when she does need the help, we will provide it, but within the context of a budget and sharing of the info about her cash flow. wish me luck...

ok update, so got together with MIL today. Unsolicited she told me about a couple of bills she had sent out, and reiterated two things. One, that if she got the tax rebate, she wouldn't need our help this month. She was quite insistent on this, almost made me think a guilty conscience was at play, on her part. Second, that she wanted to feel free to be able to do things like send birthday money to her granddaughter, without feeling constrained if I was aware of it. (Mind you, my niece is an adult, married and working..... and the daughter of the sister who dropped out of helping MIL). So I simply told her that I respected her desire to spend her money the way she wanted, and told her I had come up with a plan for her to be able to do that and pay the bills with an amount from us that we were more comfortable with. I had written it all out for her, detailing all her monthly expenses, showing her monthly income and our "donation", and what she would be left with after bills paid. I simply gave it to her, saying I knew she was capable, but I hoped this would be helpful. And just left it at that. We'll see. My husband is going to raise the POA topic with her at a separate time, she's a bit sensitive now about maintaining privacy and independence. I know the risk of waiting a bit, but he thinks he'll be able to start that conversation successfully if she has a week or do of managing bills on her own.

ok, would appreciate advice on how to advance this topic with her. She has proven to be protective of her privacy - i.e., not wanting me to see where all her dollars are going. How do I advance POA in that setting? appreciate your input.

Regarding the POA ... please do not tie that to whether or not she can successfully manage within her budget. That is a document that all elderly people should have in place well before need. If she has a stroke next week and suddenly can't manage her finances, it will be a great relief to her to know she planned ahead and someone has authority to act for her.

hi everyone, all helpful answers. In the beginning, I was not part of the decision equation, it was my husband and my sister in law, and they agreed to pay a specific bill, basically the mortgage payment on her condo. We don't really have the space to move her in with us, and basically to do that would be the equivalent of mental suicide. She is not a mean person, but is stubborn and also emotionally needy. My sister in law, to give her credit, did have her living with her for 6 months and it did not work out, to no fault of SIL or BIL. So to maintain her in an independent living situation as long as we can does seem the best thing, and actually the mortgage is cheap compared to other options. So my hubby and SIL agreed to pay it, taking turns, every other month. At the outset, my hubby made it clear that this was a priority no matter what... I didn't get a vote even tho I am the book keeper. I just got to deal.
As long as his sister was a player it did prove doable. When she dropped out of the picture, we were in the season of the year that sales are typically good and commissions high, so I kept the status quo. It was during this period that MIL solicited my help with the aid paperwork, and I began sharing my observations with my husband, in regards to the question of just how much support she needed. He agreed and actually was the first to raise the question of whether we should be more involved in her finances. He is not happy with his sister dropping out of the program but we don't want do create a family feud either. There may be a time we have to come back to her, but I want to do that constructively. So when at first, MIL seemed amenable to let me know what was going on, and keep track of things, it was a huge relief to me. Managing two budgets, hers as well as mine, actually was a simplification of my situation. Not only do I deal with a fluctuating income, I still have one child finishing college, and we are recovering from my husband's layoff three years ago. So jeanne, no, we don't have all the assets you are describing, I have been working so hard to re-establish those things (I actually have a second job). I can manage the cash flow of two households as long as I have all the information and some input. If I don't have the info, then it's not realistic. And its not realistic to provide a blank check.
all responses reinforced that to me, so thank you very much for helping me to proceed forward in a guilt free fashion.
What has happened since the conversation with my MIL, when she told me she no longer wanted me involved in her bill paying. During that conversation I indicated our financial needs, and that I couldn't simply give her a check each month without knowing what was going on. We ended the conversation without agreeing on a plan. It was not a conversation that was angry in any way - but even though my communication was controlled I am sure my frustration was evident.
I did not call her for two days afterwards. Even with the storm. (Power did not go out in our area) Call me mean but I was resentful, angry, frustrated. Thats when I turned to this forum. I learned a lot in a short amount of time. And your responses helped me.
I did call her this evening. Her first concern was that I was angry with her. Call me manipulating, but I chose to say a white lie and say I was just busy. But I knew I also had a bit of a power position, if you get my drift. She was on the defensive, explaining that she didn't want to share with me every expenditure she made. For example, gifts to extended family members. (Well she's right, I don't feel she should feel obligated, and if its coming out of my pocket, forgetaboutit.) And she went on to say, that she is expecting a tax rebate this month, so she is trying to manage things so she won't be needing our check this month.
I said great, but I had also come up with another plan, that I wanted to go over with her personally (not over the phone). Which is, an amount (essentially half what we were trying to give before) that after discussion, both hubby and I are comfortable with. It will require her to adhere to a budget, which I have prepared, both in general, and specifically for the month of November, because I know some of the specific bills before she closed the door. So I am taking the tack of "here's how much help you can count on, this is when it will be deposited, here's a plan for managing your bills".
If she is successful with this, great. If she is not and requires further help, I am then going to stand firm with her (and hubby) that we need to have access to all info on her monthly cash-flow, and also then begin conversations about POA.
thanks to this community for info and support!
also, additional replies and advice are welcomed....

You and your husband are being extremely generous to help support MIL. That is awesome if you can afford to do so.

Does your husband have good disability insurance? Do you have enough ready cash set aside to tide you over a couple of months if your husband had an accident or illness and was unable to work temporarily? Are you setting aside money for your own old age? If your situation is financially sound then I applaud your generosity. If helping MIL support herself in her old age is taking away from your own ability to support yourself in your own old age or in a temporary period of unemployment, then I'm not sure about the applause. Maybe you need to rethink the situation.

Assuming you can afford to help support MIL, then, yes, you deserve to know what is really going on. You have found that out. You know that she can get by adequately on her own funds plus $x from you each month. Give her $x each month. If things change for her or she can't manage on the amount you think should be adequate, then revisit the situation. Helping her fill out the aid application each year will give you insight into her financial situation.

Tell her, "You're right. You do a fine job of paying your own bills and managing your money. I'll bow out unless you ask for my help. We are going to be able to give you $x the last Friday of each month. If you'd like, I can help draw up a budget so you can see how your income will cover everything and what amount you'll have left over as spending money. But I'll only do that if you want me to."

Good luck!

Instead of just handing over money to be spent as seen fit; why not offer to purchase certain items...pay the electric bill, phone, gasoline or groceries. Seems to me if you are giving money to enable someone you have the right to know where it is going and why.

I think I would calculate an amount that you think is the minimum is she needs while still fitting into your budget (on the conservative side). I would tell her you are giving her a fixed amount. Let her manage it beyond that. If it is not enough, she will have to come back to you. You are being very generous. You have every right to ask for details. If she doesn't want to do that, give her a minimum amount.