We had a situation similar to that of the OP with my grandmother. I was not one of the primary participants, so, my memory might be a little vague. My grandmother had three daughters, and as she got older, developed very severe dementia. She moved into our house when I was in 10th grade. We had four kids in our house, and really three bedrooms. My parents converted the family room downstairs to be their bedroom, and grandma got the master bedroom upstairs. My mom and her youngest sister alternated having grandma stay for a time with the families. This was necessary because both grandma and dad had very strong personalities and locked horns frequently. We lived in the Chicago area, and all lived within 20-30 minutes of each other. One disagreement with my dad resulted in my grandma wandering off and ending up sleeping on the floor of her childhood home in a dangerous neighborhood in Chicago.
My second year of undergrad, my parents decided to move to Gainesville, Florida, so that we older three siblings could attend Univ. of Florida. Grandma was coming with us. Dad wanted grandma to stay with her other daughters for a time so we could settle in. My mom's youngest sister wasn't able to keep her for any lenghth of time at the time we were moving, so Dad asked the third sister, who actually lived in Milwaukee at the time. She had suffered a "nervous breakdown" several years before, about six, and her husband told my dad no way she could stay with them. (We seem to have no shortage of bull-headed people in our family). So, grandma showed up by plane the Sunday after we arrived Friday (my aunt was able to keep her from Thursday to Sunday). Nobody in my family has kept any contact with the family from Milwaukee since then. I haven't heard from or seen my aunt or cousins since that time.
Now, you would think that with such stubborn people in my family that the worst thing somebody said or did to me would be one of my own. It wasn't. They all have said mean things, but don't compare to my in-laws. My in-laws somehow take issue with the fact that I am an intelligent and independent human being who would be competent and capable even if I weren't married to DH.
It's a long story. In summary, my FIL died when we were married about 5 months, in November. At Christmas time, my DH, MIL, DH's aunt, uncle and adult cousin were sitting around the dining room table, and they were discussing my MIL's financial affairs. It somehow came up that I wasn't a real member of the family, since I hadn't been born into the family, so when she made her will I should be written out of it, if by some chance my husband should predecease her. This was such a hateful, selfish thought that it still chills me, 26 years later. The irony of the situation is twofold. Ever since I finished medical school, we have given her regular monthly payments of about $200-600. We took out a second mortgage on her house, and made payments on the mortgage to make extensive repairs to her house (I haven't calculated how many thousands of dollars, it would make me sick).
And, irony of ironies, my brother was the attorney who drew up her will and her durable power of attorney, and we, DH and I, paid the bill for her. My husband is her guardian now. She is in a NH out of state. If by some chance, he should predecease her, I think I'll let her "real family" take over guardianship.