Just a few comments (apologies - I've only had time to skim the last few pages this morning).
Can you be more specific about the lawyer's advice conflicting with DB? It's not really a one size fits all kind of thing.
Your finances - a few threads back you said you were needing to educate yourself about the household finances, and now you mention your MIL has your credit card. I'm somewhat glad to hear that you know how much is in savings, but please reassure me you have a full handle on the household expenses (how much is being spent, where the funds are coming from, what the bills actually are, whose name is on what etc.
Now that you've told her all of this - don't repeat yourself. If the time comes - it should be her who initiates the discussion.
One last thing - about telling the kids. This is entirely from my own perspective and is influenced by my situation. When STBX left, I pushed for not telling the kids the full truth and just saying that he had to live closer to work for the time being. I viewed it as "keeping the road home smooth". This blew up when my daughter was the one who revealed him to be living with his girlfriend when she asked me if he loved her more than me because he stroked her arm and slept in the same bed as her. Your situation is not as extreme (although it is pretty bad, as you suspect OM to be in your house when you aren't there). All I can say, is that now, I regret not telling D7 the truth from the beginning. I thought I was protecting her, but instead I became another adult who lied to her about her life. I won't do that again.
