I should add that my MIL has NEVER been good with money-she's gone through at lease one foreclosure and bankruptcy. She is now 71 and was recently diagnosed with Alzheimer's. My husband and I have POA, but we shouldn't be tied as guarantors, should we? No one is disputing she owes the money... She had borrowed about $60K at first in 2000, then borrowed another $6K in 2006...and she stopped paying her friend altogether in 2009. We just sold her mobile home and was able to turn over all $15K to her friend, so that knocked it down a little. My MIL gets about $14,500 a year in SS and that's it. She has no other assets now that the MH was sold. She is living on another friend's property while my husband and I search for a suitable facility as she is declining in her memory pretty quickly. Any advice? We live in CA if that helps. Thank you for your time all, I've been visiting the site for about four months now and it has provided me and my husband (her only child) some comfort in that we are not alone in dealing with an aging parent that not only was never fiscally responsible, but now has this disease.
I would not sign anything.
From what I know of general principles of debt law, you and your husband are not personally responsible for your MIL's debts. From what I gather she doesn't have enough to pay a memory care facility so you may have to find one that accepts some form of assistance. They will also more than likely take all her SS income. So she will not have any money to pay off the debt if that occurs. I do know that some things differ state by state so you would need to consult an expert in California law and their policies may be more liberal than other states. I know people who moved there so their child could get care for her entire life.. Do not rely solely on answers here. Good luck.
Even if you are proxies under a DPOA, and if the money isn't there, those debts aren't your obligation. From what I've read, it sounds as if MIL is judgment proof, so any suit would yield nothing collectible, and might even be in violation of any "protected individuals" legal protection under CA law.
However, it sounds as though she's intimating a threat when she tells you that you "need to think about it." Do you think she's violent or would harass you? What about her son?
If so, you might want to consider getting a PPO against her, and her son. If you do, be sure to include information on the business losses and failure to pay state taxes.