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My 90 year old grandmother was recently diagnosed with dementia. She already accuses us of stealing her stuff since we had to take her car keys away. When the holidays come around she will be distraught that these things are missing. We ask her if she gave the items away, she swears she didn't but relatives say she gave it to them and will not return them. They live out of state so retrieving them would be difficult.

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Is she living with you or are you living with her? I'm assuming she was alone when the items disappeared, so it's really a question of her statements vs. the relative's claims.

Personally, I think it's tacky of relatives not to return something that was allegedly freely given, but that's probably beside the point.

As to legal action, there's a question of fact - did she or did she not give the items away, vs. the relatives' claims that she did. I really doubt any law enforcement agency would get involved with this kind of fact discrepancy, especially since your grandmother has been diagnosed with dementia.

I suppose you could ask APS to intervene, but I'm not sure they would for something that doesn't jeopardize her health. However, if the items are significant and worth thousands of dollars, they might at least have some suggestions for you.

The mature thing to do would be for the relatives to just return the items, and wait until they're ready for disposition after your grandmother passes. If they don't, perhaps they should just stay away and not bother her, unless she really wants to see them.

I'm wondering though how it was that they visited and took the items without anyone else becoming aware of the situation.

I'm wondering as well if GM has a will, or has designated anyone to act under a power of attorney. If not, that's something that becomes a priority if she still has enough cognition to execute legal documents.
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Good grief. Make them stop it!

But, maybe she will forget about at least some of the items.

That said, I once had to buy my mother a replacement for a TEA TOWEL that went missing. Fortunately the one I could find at WalMart looked similar enough and it worked. Sooo...maybe start shopping? Tell her they were "borrowed" and/or so and so is keeping it safe for you? There is no good reason these greedy relatives could not wait and not cause you this particular headache, IMHO!!

She then directed me to take it back home for her.

I still have it.
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You could try Asking for those items back, explaining that it is causing Gma extreme distress, and also telling them that they can indeed have the items back, once Gma passes, and that you will keep a list noting who was "given" what to assure them. It might work, especially if they have any Love, respect and concern for Gma's condition.
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We are in the process of moving her in with us, but currently lives next door. They were staying with her for a visit, and we never expected that they would take advantage of her in that manner. She does have a will. We have explained that there must be some mistake, and that she is upset when she finds the items missing. The relative in question now says my grandmother gave her the items years ago, if that were true I suspect she would remember.
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I personally suspect that your grandmother did give them the items. Memory loss can go back a few years. Some history is retained intact, some can be rewritten, and some can be lost. If your relative told you the items were gifted, I would just let it go and not worry about it anymore. I hope that your grandmother will not obsess on the missing items, particularly because they are so far away.
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Yeah, realistically, there's nothing you can do.

PS, you mention her will as if that has a bearing here. It doesn't. If you want to protect her things in the future, don't leave her alone with vultures.
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