
Such a difficult situation.
Ativan often is used with cancer patients because of it's unique anti-nausea properties (as well as anti-anxiety/muscle relaxant). How is he taking it that it's not working? A simple adjustment of dosage times or dosage could do the trick. I'd work/play around with it before switching. Doses round the clock are usually more effective than doses taken when anxiety hits, if that makes sense.
Under normal circumstances, I'd say a psychiatrist could be helpful. But in this case I'd say the palliative care team, who may well have a psychiatrist on board or at least available for consults, is very used to dealing with the issues that your poor FIL faces. Pain and anxiety are a tough combination. Medicines used to treat both also can negatively affect one's mental status so that sleeping and potential for falls, confusion, etc, are going to be likely side effects. Finding medications that adequately control pain and anxiety without the negative effects in a patient in such a short time is a very tall order, unfortunately.
My suggestion would be to alter the ativan dosing if you can and see if it helps. I'd also want to add in some complementary therapies which can help your FIL cope in a non-medical way. Is there a cancer support center nearby? They have volunteers there who can offer things like individual counseling, Reiki, accupressure, etc. At home you can try to provide other complementary therapies like music, prayer (#1 used complementary therapy, btw), aromatherapy, meditation, relaxation, etc - whichever you think he might benefit from. If he's religious, you might consider taking him to a Healing Mass**. Give it a shot. PM me if I can be of any help.
(**Remember, healing can be not only physical, but emotional. I've had patients that were terrified to die because they were harboring something inside that they were afraid of. Spiritual counseling, different from religious counseling, can help lessen someone's anxiety and get to the stage of peace. Not sure this would apply here, but you never know.)