Bless you, you sound like a very kind and patient person.

You could try "client-centered" listening. The basic idea is to show the person that they are understood and therefore not alone.

So for example if they were to say "Mary stole my watch." a client-centered response would not look at the truth or falseness of this claim. Instead it would focus on the claim itself and the underlying feelings. Possible responses might be "You feel violated because of your watch." "You don't trust Mary at all." "You are really angry at Mary right now." The aim of the response is to make the relative feel understood and therefore not alone.

By contrast, a response such as "Mary would never do such a thing." is probably factually true but is a direct contradiction of the person. Taking this approach will likely make the person feel more alone, more misunderstood, and therefore more upset.

Of course you would not just AGREE that Mary took the watch. You would try to avoid taking a position on the issue of fact and concentrate instead on connecting with the person on the level of feelings.

If the person replies by saying something like "No I don't feel violated." you acknowledge that and the two of you work together to come to a stated understanding of what they do feel at that moment. Your goal is to say "it sounds like you feel X right now." and they say "Yes that is exactly how I feel." You don't have to achieve that literal goal, necessarily, but movement in that direction is often helpful to the other person.

I don't know if you can actually get the person to avoid these paranoid topics. It sounds like the person may have a mental disorder that tends to bring them to these places of paranoia. It sounds like they could benefit from therapy, despite what they say. But my thought is that the plan of openly acknowledging the underlying feelings is worth trying, with the goal of reducing their paranoid thoughts about you. As you suggested, plans to subtly redirect or actively disagree runs the risk of kindling the very paranoid thoughts that you are trying to reduce.