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Is Wife under a doctor's care for depression? Has she been diagnosed? None of the suggestions people have offered would be harmful -- going to a support meeting can indeed provide suport -- but also realize that true clinical depression is a serious illness and usually takes more than DIY efforts to manage. If she is now getting treatment, perhaps it needs to be adjusted. If she has never been diagnosed or treated it might be time for that. Her family should know about your observations.
There is another possibility here. She may be experiencing anticipatory mourning. When your spouse has dementia you watch them leave you bit by bit. Memory by memory. It is natural to feel grief. And if people are trying to cheer you up all the time without acknowledging your legitimate feelings, that can just add to the stress. (I speak from experience.) This is another reason meeting with other caregivers of persons with dementia is supportive. They get it. Few others do.
You are kind to be concerned. Yes, share your observations with her family.
Absolutely tell the family of the wife/mother's needs. You are hired to care for the husband, so I am guessing you cannot leave him alone. Call the family and tell them that someone needs to come care for the mother. At the least she needs to be professionally evaluated by a physician. Being evaluated is Step One. Then, if needed, the physician can either prescribe something for depression or he can submit the forms for her to be assisted too.
Good luck hon, it's not easy being a caregiver.
How often to you help with caregiving? Can the husband be left at home for a certain amount of time? If yes, maybe you and the wife can go out and do things just to get out of the house.... or is she afraid to leave her husband? Does she like gardening? I know just going to Home Depot and seeing all the flowers can brighten my day, even if I don't purchase anything.
I know I bring this up often on the forums here, would the husband and wife like to work on a family tree? You can start with having the wife get out photo albums and going through them. If she comes to a photo where she is wondering what happened to that person, that would be a good time to introduce her to Ancestry.com where she could possibly find that information. One has to pay a membership fees, but it is well worth it :)