My mother died with dementia nearly a year ago. I lived with her as caregiver for nine years. There were many deaths in that time period - that I never told her about. Because I realized that she would take in the information at that moment - but would soon forget. A nurse once told me that each time that she'd have to be told this sad news - because she didn't remember being told previously - would be like hearing it for the first time.
I felt this was probably true because she never seemed to remember my father's death - which happened several years before she was diagnosed with AZ. In the early years, when she'd ask for him, I'd try to remind her that he had died several years prior. I even got so specific as to show her his death notices in the paper or his death certificate. But then she'd accuse me/the family of keeping this information from her...and tell us what awful people we were to treat her this way. This was truly heartbreaking, so I'd just tell her that PaPa had gone to town (they lived out in the country and he'd often take the car and go 'to town' to run errands, pay bills, etc.). After a while she stopped asking. But every now and then, years later, she'd call out his name at bedtime - tell him it's time to come to bed. They were were married 67 years when he died.
Before she passed, a number of her relatives and friends that she'd grown up with died, and so did one of her most protective sons. Soon after she passed, my sisters and nieces went to a nursing home where her first cousin was a patient, to tell her of our mother's passing. Cousin Mae had AZ as well...we spent about an hour visiting with her. She charmed us with the most delightful and cherry conversation - all about pound cake! Everyone was waiting for me to tell her - but I just couldn't. When we reminded her who we were "Carrie's daughters", she never asked how mom was doing. I think she knew why we were there. At any rate, I didn't have the heart to ruin her day. So I didn't tell. her. Mae died a few months later.
On the other hand...soon after my mother had a minor stroke, about a year before she died, she returned home from the hospital talking about things that had been discussed in her presence years before. She soon lost the connection. Which caused me to believe that AZ is not a condition where the victim does not take in and hold information, but a condition where they continue to take in information but are unable to access and process it in a normal way.
Bottomline, since she would not be able to recall the information for more than a few minutes, I felt it would be cruel to give my mother such heartbreaking news - that would make her sad temporarily then she'd forget.