Hi Tas, welcome to TP
I'm not clear about what's been said exactly.
Any money solely in your mother in law's name can't be touched, she doesn't even need to tell anyone about it, the assessment of finances should be for you FIL alone. Only money in his name solely or half the money in any joint accounts will be taken into consideration, you do have to disclose any joint accounts.
If he had (roughly) under £14k in his name the council pay, £14k - £24k he pays part over £24k and he self funds no one else has to pay anything.
Top ups can be paid if you want a £1k a week and the council can find a suitable place for less, but it has to meet all his needs as defined in the 2015 act, below is a link to the AZ society factsheet,
No one, sons, wife or whatever would "be liable to pay" anything.
Share what you're happy to but what you've said doesn't seem right.
There is one caveat, if all the funds/house were recently put into someone else's name specially if it was after diagnosis the they may see that as being a "deprivation of assets" but if the money was and has been always in your MIL's name then tough on the council they have to pay.
As Beate says don't sign anything until you have the full picture, I suggest you go to; the local AZ society, AgeUK or citizens advice before you go any further.
Posting on here will get you some very sound advice but you might have to disclose more than you're comfortable with on a public forum.
K
http://www.alzheimers.org.uk/site/scripts/download_info.php?downloadID=1461