I've been debating about whether to post to you. I'll be honest, I didn't listen to puppy's advice in my own sitch because I had a hard time balancing my "nice guy"-ness with being firm. I'm now strongly on the way to D.
That said, you have to find what's comfortable for you - only you know your own sitch. But you know your wife. Why would she ask for the things she's asking for? What is her rationale? Deep down you know, whether you want to admit it or not - you've been together 12 years. You know how she reacts and how she determines and how she decides. And she's reading you the same way. And she wrote that letter with your reactions in mind.
It's a game. A dance. Almost a grab for power.
It's up to you to determine how you'll react. You may not be as blunt as puppy suggests - I certainly wasn't. But how do you determine whose best interests are at stake here?
No answers, a lot of questions. I wish you the best in this difficult sitch.