Family Insanity and Personal Responsibility

My mother in law is schizophrenic. I am afraid if my family didn't let her live with us she would be un-medicated and eventually neglected or maybe even murdered in a adult living facility because of her obnoxious behaviour (when she is medicated she is hard to take, off her medications it's unbelievable).

I think we know how to handle her, but I worry I might be held responsible if when she is out on one of her walks she somehow causes a car accident or something similar. A woman hit her in a cross walk a few years ago, so I'm not unnecessarily worried. I don't want to loose my house and business because of my insane relative, but I don't want her neglected in a mental hospital or a escaping to live under a bridge somewhere. Her whole live revolves around taking long walks and smoking. What should a responsible person do in such a case?