My sister has always been a compulsive shopper/hoarder. Now I've learned she's paying rent for the posh apartment of her layabout son, who threatens estrangement if she doesn't go along. I know that she has very little income and is running through her savings and I've told her of my concern. I think I need to tell her I'm not planning to be her backup plan for when she goes broke but not sure how to do this without permanently damaging relations.
Gosh, a prodigal sister rather than a prodigal son!
I would advise your sister to halve her saving right now and put this into a bank account no one, especially her son, knows about.
Hoarding and compulsive shopping are anxiety issues, so counselling for that may help.
You could explain you are unable to help but offer to assist in the sale of hoarded and surplus goods to boost the coffers, if you think she'd part with them. I would suggest she tries toughlove with her son but I cannot see that happening tbh.
I have a prodigal sister as well and she bled my mother of thousands - simply because Mum let her. After Mum died, she started on me but I'm in no position to help anyone financially, so all her pleadings and threats fell on deaf ears. She simply had to shift for herself.
You may have to risk the permanent rift if your sister does go broke and is desperate to help her chick. She could even be pushed into taking a loan from some shark. But if you normally have a caring relationship, just telling her your money is tied up, should not lead to a break.
I'd speak up before the question is asked. You say that you've just found out about her paying her son's rent - this might be a good time to say something like " I'm sorry to hear that you're paying John's rent - you'll run out of money soon if you keep doing that. And I'm just telling you now, that my money is securely tied up so I'd never be able to help you out". If you say it in a caring way , hopefully she wouldn't take offense. If you wait until she is broke and begging for help, the conversation would be much more difficult.
I think that sometimes as with a profligate child, the best love is tough love.
She and her husband are presumably well over 18, ie fully grown-up and they must take the responsibility for their own troubles. They got themselves into this mess, they must get themselves out of it and not look to others to help them.
I know it will not be easy, I would find it very difficult if my sister was in trouble, to leave her to it, but sometimes one must.
If they go bankrupt that will be the end of paying the son's rent, they really will not have the money to do so.