You sound like a wonderful person, and a great father.
Hope you don't mind a 'failure' (I was divorced 2 weeks ago) trying to help you out!
I don't know what I would have done with xH if he didn't have family in town. He stayed with his dad after the initial confession. Then came back out of stubbornness ('My house too!'). Then he reasonably left 6 months later. I supposed that your wife could do the same, getting defensive and saying "YOU leave, its my house too".
I can totally understand you not wanting your daughter (or even your wife) living in bad conditions. Not to mention, by letting your wife continue to live in the house, you get to see D5 all the time. That is hard, because you know it will change if she leaves.
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Which means either giving more to W then she is entitled by law, or having D live here all the time, and allowing W to spend time here and pick up daugher from here (which would be Cake eating big time).
Kind of my situation now. H 'lives' at his dads (and probably sleeps lots of places), but watches the kids for us in my house, while I work (what used to be our married house). Our situation is tricky because of both of our work hours. But it IS hard to have him there all the time.
I suppose you have to look into the future and realize that she will get a job and can support herself. Is she looking?