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Don't ever feel guilty if you cannot do it any longer. I have that feeling daily. But if it weren't for the people of Hospice here with me, I would have given up a long time ago. Good luck and God Bless.
As long as you are helping her, she won't need to change. You'll have to decide how much you can do, then bring in a social worker to help you figure out how to best meet your mother's needs. Your idea of AL sounds like the best one to me. Your mother probably feels she doesn't need it, since she already has AL with you as the assistant.
Please let us know how it goes. It does sound like you need to set her up in a place and reclaim your life. Chances are good that after she has been in AL for a while, your mother could actually enjoy it.
It sounds like your mother cannot live alone. I don't know if she needs 24/7 supervision at this point but with dementia that usually happens sooner or later. If that is what she has to have and she is no longer able to make rational decisions herself, then that is what will have to be arranged for her whether she likes it or not.
You got into this for the sake of the dog. Can you simply take the dog to live with you?
Would your mother's doctor specify that she needs care and that she is not competent to make decisions herself?
If your mother has been narcissistic your whole life I can understand why you don't want to take care of her and why this feels like a life sentence. I can also understand (through other posts I've read) that you have been indoctrinated to think you are responsible for her. There are many posts here about narcissistic parents. You might find hope and strength from reading some.
Again, this is only a life sentence if you allow it to be. One way or another there are ways to disassociate yourself from responsibility for her day-to-day care. First, would her doctor consider her incompetent? From there people can give you specific suggestions about how to proceed.