Wow. With the weird accusations and the doctor’s opinion on top of it, I don’t think dementia is out of the question whatsoever. When my mom started with her dementia, she accused all sorts of people she had known forever of stealing stuff. She took offense at things that never would have offended her. Paranoia and emotional lability are not uncommon symptoms in early dementia. What is worse (in terms of your issue) is that she sounded entirely sane when she was saying all this stuff. Her attorney may have no idea that she is a bit off her rocker.
Any chance you can find an attorney who does both elder law and divorce law? This sounds like a very sticky problem, and one with answers that would depend very much on the jurisdiction. I would not want to venture into this with anyone governmental until you have your own counsel. There are some great people in public service, but there have been some horror stories, too. If they get a governmental guardian instead of you appointed for your wife, things could go very badly. Don’t delay, get right on this.
The ray of hope is that there are things other than primary dementia that can cause paranoia and emotional lability in a 68 year old–things that are treatable. A urinary tract infection or a bad medication interaction can cause those symptoms, and can certainly make them worse in a dementia patient. In someone of her age, the other symptoms she might previously have had with a UTI also might be absent, so she might not believe she could possibly have any such thing. I really hope you can get her seen by a physician.
