So I want to start off by saying the "horrible" brother-in-law is my partners brother, and my "wonderful" sister-in-law is his wife and one of my very close and ONLY mom friends. I have babysat her kid since she gave birth and she always babysit mine (free both ways). She is the only person close i can confide in and ask mom advice. My mom is states away and I only have her.
My brother in law has always been kind of mean, he finds it funny to poke at people's feelings, almost "ragebaiting" them but much worse until they are at or past their breaking point, he doesn't understand times and place, he has cheated in the past (but supposedly grown), he makes racist and awful jokes..sometimes he is physically violent in small ways thinking its funny, I could go on.
But here recently he has gotten worse.
I mean, I think he has, but honestly it might be the fact I am postpartum and my partner is just fed up with his brother now that he's realizing he isn't going to change.
I never really minded how my brother-in-law acted, until I had my daughter this year. I dont know for sure, but I dont think its that I've gotten more sensitive to it, but that I care for her alot more then myself. His jokes or pickings at me never bugged me, I often found them kinda funny honestly, his ones at my partner I felt sometimes went to far but in a "annoying sibling who doesn't know boundaries" way. But now to get at me he picks on my daughter, he calls her names or purposely scares her, he says mean things, I hate it, I almost want to get violent everytime but honestly thats a fight I'd lose.
Here recently he's gotten so bad I don't want to be around my SIL if he's around, so I'll purposely leave early or only see her for coffee dates, shop outings, things I KNOW he wouldn't join in. I haven't visited her house in months except maybe three times and before that I came biweekly. I just have done almost everything to avoid him besides holidays.
Now, my partner is on the same page. He just doesn't want to be around his brother, we used to go on double dates all the time but now my partner fears being hurt or a joke being made about our daughter that throws my mood off... we used to hang out all together and have sleepovers but we dont want to be stuck at his house overnight or have him around .. unable to escape without confrontation..
I almost feel morally obligated to tell my sister-in-law because since christmas its gotten way worse, and I dont want to be around him at all, but we are so so close. But I fear she'll take offense, and tell him, or even if she doesn't, tell him anyways. I dont want our friendship effected because her boyfriends a ass, I dont want to break my partners trust about what he's told me concerning how he feels about his brother, I dont want to cause family drama.. I dont want the dynamic to be hurt.
How do I/we approach this either way?
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Your brother in law sounds a lot like my older brother and your sister in law and your relationship with your sister in law sounds a lot like mine and our relationship. Honestly if it were me I’d bring it up to sister in law how you both feel about him making fun of your child and being cruel to your child as her being a mother chances are she sees it and would feel the same if it were her child but just doesn’t saying anything assuming you guys are okay with it or you would speak up maybe if possible have your partner talk to his brother while you talk to sister in law like at the same time so it’s not like you are blindsiding one piece just mention it’s makes you both feel uncomfortable hence why you wanted to talk to her while partner tries talking to brother

You need to tell her and talk to her about this. If she is as genuine and kind of a person as you describe her she should be understanding. Heck if anything, if her husband is this awful to his brother, you, and your daughter, I can imagine that he is even worse with his wife and child. If so she needs to consider if she's okay with being treated that way for the rest of her life. She and her child don't deserve to be with such a POS.

I mean has your brother spoken up? You all need to set boundaries. Go on YouTube and look up how to set boundaries with toxic family members. He crossing boundaries that maybe he doesn’t know have been set? In the moment I would have my husband address it with him and tell him directly we do not like when u do xyz. Maybe use the sandwich method…. Something nice, then address the issue… then something nice so he doesn’t get defensive. “Hey Brian we like spending time with you all but …. When u make fun of her hair, and crack jokes about her, and give him concrete examples…. And ( a consequence) we won’t be able to come over here or hang out with you. I love you… you’re my bro… but this has to stop. “ and then give him some time to show u he is taking things serious. And if he continues without making effort… they will know exactly why you don’t come around. And do it openly in front of the sis n law and that way everyone gets the picture.