I think it depends on the level of insight the person with the dementia has. My Mil, with AZ and vascular dementia will ask about her late husband - and I'd say about 90% of the time, she will suddenly remember herself that he passed away a long time ago. If we have tried a little white lie, and said he's in work, or gone to the club, and she then remembers, not surprisingly she can get very angry at us 'lying', or (perhaps worse) be really embarrassed that she forgot, and sad that we have fibbed. Trouble is, its so hard to recognize when she is going to suddenly remember. At the moment, we tend to gently say 'Think about it, love - what happened to T**** ?', and this mostly prompts her to remember, and whilst it may cause her a tear or two, the level of upset isn't as great as if she thinks we have been lying to her. Its the same thing when she asks to go 'home' - we try to distract, we say we'll discus it later because we are busy, or whatever - but we don't attempt to fib any more, as if she catches us out, there is trouble
Where the 'home' situation is concerned, there have even been times when she asks
knowing the answer, but admits she thinks if she 'keeps on at us' we will give in and take her - if that's the mind frame when she asks, and its awfully hard to work that out straight away, using fibs can cause her to get really angry
It makes it so much harder for her - I wish she would accept the 'Little white lies', if only for her peace of mind x