The big picture is that you need to have a doctor say how he's not able to care for himself, including making financial decisions.
Then, you can go to court and request a conservator/guardian. Here's the kicker, though: since your wife already has POA, it's likely that if the court were to appoint anyone, it would be her -- and if she's not willing to be strong with your son now, there's no assurance that she would in the future. So, any court petition would have to request that a public administrator be appointed (i.e., not a family or friend). Your father-in-law's estate will incur expenses to pay for the public administrator.
At this point, it would be prudent to work with the hospice caseworker and see if they can give you some strategic direction.
Good luck and best wishes! I hope that you find this information to be helpful and this answer to be ACCEPTable!
If nothing else, this real life example is THE REASON why people should do careful estate planning
NOW including who should care for and have say over them and in what circumstances. You always have to plan for the worst. It's not just about wills. It's about who will have control over your stuff when you are not able to exercise independent judgment.