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And the police will have it notated that the woman at their address has dementia and will treat her with "kid gloves" if and when the time comes again.
It's time your stepfather sees an elder law attorney to best help him sort out the financial situation, and get your mother placed sooner than later.
Best wishes.
If that is not possible and you can get caregivers in to take care of her, make sure she does not wander that is an option as well.
There are medications for the anxiety and agitation.
It is important though to know the type of dementia she has.
For the questions about should they divorce to protect his assets this is a question that is best left to an Elder Care Attorney.
My guess would be that Memory Care in a facility will be the best option, that in-home care will not be likely to help, and that an asset split is worth considering, particularly if your stepfather’s assets are in his sole name. But I am not the expert on this, and I hope that others will also post.