Hey Falstaff909, welcome.
All I can say is that this sounds really familiar:
she admitted that she is moving herself and the kids in with this guy she met just two months ago. When I told her how reckless this was and how it could damage the children her response was that she's putting herself first and that she deserves to be happy.
She has been living in San Diego now for a week and still hasn't told the children what is going on.
My H's kids' mom has many BPD type traits. After her husband (my H's former best friend, with many NPD type traits) had some kind of emotional affair/involvement with a friend, she (the kids' mom) apparently went on a month+ road trip to... somewhere? leaving the kids with their stepdad. Mom did not tell us (H and I) about this trip and the only way we found out that the kids were at Mom and Stepdad's with no Mom there was because they let it slip. The kids had no idea when Mom was coming back. She sort of did come back but now I'm hearing hints again that she isn't around? It's all pretty unclear, yet with the same vibes of "well she's just putting her own wellness first", same as you. So please know, you're with people who get it.
You're in a different position, though, as a relatively healthy stepdad. You've also been in a Dad type position for years with no issues from her. I agree with Turkish, the fact that
her son is staying with you is a huge, huge, huge deal.
Here on the Divorce/Custody/Conflicted board we can help you with legal questions about this limbo situation and also with working through how you're feeling and what you want in all of this. There's a lot of parenting/stepparenting experience here, too, as I see that one of your concerns is that she hasn't told the kids about her choices. There are also parents here, too, who have had kids in residential/inpatient treatment.
It's really good that you have a therapist in all this, too. The more support you have, the better.
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When's your D11's release date? Are you in touch directly with the doctors, as "main parent"?
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Hang in there. Keep posting, we'll be here for you.