Sorry to create confusion but I totally disagree with the more knowledgable commenters above. Your wife sounds like she is a run away freight train I say get out of the way. Move out now - go wherever you have to, a friends couch, basement whatever. Whatever anxieties she is feeling now she is blaming all on you, just get out of her way.
I think it will be much easier for her to slow down once she doesnt have to see you all the time & have you to blame. I think she isnt convinced that you know that this is over, you are still trying to get back to together with her. She has to believe you are convinced its over & your not trying to R your just being the NEW you. Trust me her new life is not gonna be easy. Let her family give her grief not you - you make it easy for her to live her fantasy & then hopefully realize the fantasy stinks. Your kids and her family will say the negative stuff you should support her and tell her you understand that she wants you to move.
Regarding telling the kids, I did some research for my own sitch and the proper way to tell kids is both parents tell them and both parents "say that they are happy about the new arrangement and that they will both be there for the kids. There will be an adjustment period, please talk to us and give us feedback because we want the new arrangement to work for everyone"
In July when my H moved out he was dead set on telling my 3 yr old it was over. I told him I would read whatever script he prepared for the conversation but I would not be able to honestly say I was okay with the new sitch. So if he wanted me to be there with our D, which he did, he would have to prepare what we would say. My H dropped the whole thing. Now he says Daddy has 2 houses?? Obviously your kids arent going to fall for that but I think its important your W knows you accept that you are headed for D but you are not thrilled about it. You want to be there to tell the kids but you are not going to say you are okay with the new sitch. I would drop the conversation about giving them hope although it will break your kids hearts not to give them hope it will push her further away.
You need to be very careful right now, your W is spinning and your Miranda warning is in full effect!!
Obviously you should protect yourself and document all the texts and email indicating that she is kicking you out. JIC
I think my H being out of the house has given us hope. Good Luck stay strong
---- M 39 H 35 D5,D4 M 4 T 9 ILYBNILWY 5/18/11 Left 7/11/11 Divorced 12/1/13