Folks! tells the story of Jon Aldrich (Tom Selleck), a successful stockbroker who is living the good life with a wife and kids until his aging father with dementia accidentally burns down his own house. Jon tries to get his sister, Arlene Aldrich (Christine Ebersole) who has two sons of her own but is an irresponsible gold digger, but she won't even open the door. As a result his father Harry Aldrich/Pop (Don Ameche) and his mother Mildred Alrdich (Anne Jackson) have to move in with him and his family. That is the moment that his good life starts going down hill.
The company he works for was apparently doing illegal things which Jon knew nothing of, but no one believes him therefore he loses his job. The problems for Jon continue to mount up as the family becomes broke, his wife Audrey (Wendy Crewson) thinks moves out with the kids, and they lose all their furniture and belongs except their apartment. Harry continues to unintentionally injure Jon, causing him hearing lost, a broken hand, a car runs over his foot, and he manages to lose a testicle.
Jon slowly starts to lose his own sanity, but in a brief moment of his own sanity Harry tells Jon that he never wanted to be a burden on him but he soon slips back into his state of dementia, where he is just happy all the time and often yells out "McDonalds". Jon talks with his mother who also says that she and his father never wanted to be a burden on him. She then tells him that she and his father have discussed it, and they want Jon to help them die so he can collect the insurance money. Jon is totally against this at first but after a while he changes his tune.