How do I set the behavior example for my children when see the effects of dementia?

What Jeanne said.

And on the hand washing point, what I used to do was sweep my mother back into the bathroom, wash my own hands and do hers at the same time. No discussion so no humiliation. Or not that she complained of, anyway!

As ff said, your parents both have damage to their brains -- different kinds of damage with different kinds of dementia -- but an autopsy would show exactly where the damage is. It is visible and tangible. It is a physical reality, not a character flaw or a choice. So correcting them will not teach them to change. Their brains are damaged.

Even quite young children can adapt to inconsistencies, especially when they understand them. Children who spend time with each of their divorced parents quickly adjust to the different routines and rules at the two houses. Children can adapt to you treating your parents differently about the rules than you treat them. You can tell the children how happy you are that their brains work so well and they can learn polite behavior.

The opportunity you have for setting an example for your children is that we show compassion to people who are ill or have impairments. That we continue to be nice to them even if they can't always be nice to us.

I care for my grandma and two children (who are my sister's but she works nonstop so they are in my care). I unfortunately have been dealing with an abusive grandmother. I have had to sit down and explain to both children that grandma is sick adn doesn't know what she's doing. I tried to explain to them that she had diabetes and sometimes when her sugar is low she doesn't know or remember to eat and gets upset that she forgets which is why she reacts the way she does. I also explained to them she has a lot of pain which is going to be helped but until it does she is upset and hurts a lot.

The older child understands. She is 6 and gets it that grandma isn't normal. it used to jsut be that grandam would yell randomly at her for doing things but I have noticed now about a year later that the little girl just doesn't even blink an eye and doesn't respond to her. When questioned she seems to understand that grandam is a special case as she's confused all the time and we always listen to our parents and elders. (although she's rebelling she does understand that). It helps that I'm constantly helping her as though she's a child. I think Emmett sees her as a child but loves her just the same. He is always trying to help her eat, making sure she takes her pills and crawling up with her to sit with her while watching his TV or eating a snack.

I think it's all in the explanations and how it's handled. Anger is hard to understand in children but they are also forgiving. The two children I care for seem to be forgiving of grandma's angry state of mind and even going as far as to almost pity her (they might be learning from me on that one). They enjoy her when she's happy, avoid her when she's upset and ignore her when she's mad.

What they will see is whether or not bad behaviors win. Make sure they see that bad behaviors don't work. They are smarter than you think.

findthehumor, if both your parents have dementia, please note that their brain is broken, and no amount of correcting what they do and say is going to change anything.   Your parents can no longer understand.   It's not their fault  :(

How old are your children?   If they are old enough to understand about illness, tell them what is going on with their Grandparents.   You'd be surprised how smart kids are even at a young age.   If they understand, they might surprise you and help out with small things without you asking.

Please arm yourself with all the information you can about dementia.   Scroll down to the bottom of this page to the blue section.... now click on ALZHEIMER'S CARE... now look at the articles regarding Alzheimer's [which is a form of dementia] to see what will be coming down the pike as this disease progresses.