Summarize:

You might be shocked or surprised to hear your relative saying something outrageous or crude. When your relative loses their filter, don't react in shock, anger, or even ridicule. Gently let your relative know that their behavior is inappropriate and move on. There's no need to bring up an incident once it has passed and you've dealt with it in the moment. For example, say, "It's not appropriate to speak of people in that way. We do not talk like this." In some cases, it may even be appropriate to ignore the comment and not respond at all. However, this may not be a good strategy for someone who is suffering from a cognitive decline. If the situation is uncomfortable, gently guide your relative somewhere else. Speak calmly and directly to your relative as you travel elsewhere. You may also notice certain situations that target their inappropriate behavior and divert their attention prior to them seeing something or someone. If you know your relative has a tendency to say inappropriate things during certain events or situations (like being in a large crowd or around young children), guide them away ahead of time to prevent the situation from unfolding. For example, if your relative is saying something racist while at the grocery store, direct them to a different aisle or exit the store. If you're feeling like the stress of dealing with your older relative is getting to be too great, take a quick break to de-escalate. Take a walk or go outside and get some fresh air. If you're getting frustrated with your relative or need some time to cool off, remove yourself from the situation temporarily. Excuse yourself from the room and go somewhere else. You may wish to prepare a snack to help you get away and return later. Relatives have a way of saying things when others are nearby. It's up to you how you handle the situation. You can apologize for their behavior ("I'm so sorry my aunt said that to you"), clue them in, ("Sometimes my grandmother says inappropriate things due to her dementia"), or laugh it off ("All those years of embarrassing my uncle as a kid have come back on me!"). However you choose to handle the situation, think about what your relative would want. For example, if your relative has always valued privacy, they may not appreciate you saying things about their condition to strangers. However, if your relative has often valued humor and lighthearted joking, consider taking the statements in stride when out in public.
Respond to the remarks. Guide them away. Take a small break. Respond to onlookers.