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Your daughter can rule what she likes but you don't have to comply. Intervene in such a way that she has no contact with your mother except through you - after all, you're main carer. How's your daughter even able to get at your mother?
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If your mother does not understand why she is $1,000 "short" every month, then this should tell you her thinking abilities are on the decline. Financial abuse by family members is all too common, and unless you can gain access to your mother's bank account (via POA, guardianship, etc.) she will fall into debt, lose her house and won't have a place to live. Your daughter is getting these behaviors from others who taught her it was all right to take advantage of those who can least afford it. Talk with your mother, write your daughter a letter and explain how her grandmother is in debt. If all else fails, you can always use legal remedies.
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This type of behavior on the part of your daughter is consider elder abuse. Even if your mother agrees to help financially, your daughter is exploiting her. I would report it to an elder law attorney to see what can be done. Doing nothing is only increasing the problem and eventually someone, like yourself, will have to financially support your mother. Think about it. Your daughter is exploiting your mother.
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ask yourself. Who pays the bills and from what resources ? Be careful not to mess up a good , inexpensive and loving atmosphere. Maybe you could just check the cost of a live in care taker. Good luck and God bless.
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I agree with the above poster that you need to get this stopped. If your mom cannot afford her house any more and cannot afford to private pay for independent or assisted living and has to go into a nursing home on Medicaid, there will be issues with the gifting of money during the 5 year look back period.
Is your mom able to understand that she cannot afford to be giving your daughter money? If not, you have a great case to become her guardian or get financial power of attorney to protect her assets.
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IF your mom's only problem is mobility problems and she has no cognitive issues, mom can do whatever she likes with her money. However, the fact that you say that your mom seems to have difficulty "understanding" why she's short on funds would seem to indicate that mom is no longer able to handle her own affairs.
Some suggestions:
Call Adult Protective Services to investigate for financial abuse of a vulnerable elder. Ask your mom who she wants to have handle her financial affairs; get her to an Eldercare attorney to assign SOME responsible adult as PoA. Get your a referral for a neuropsych evaluation to see to what extent she is competent to handle her own affairs.

Your daughter has rule that you can't interact with her (your daughter?) or your mom? NO ONE who doesn't have guardianship can tell you that you can't interact with your mom.
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You could have your mother make you or another family member POA of her accounts and require that any expenditures go through the POA. You could also have the county aging services investigate.
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