I appreciate all the input, especially how quickly everyone has jumped in with opinions and suggestions to my dire life situation which, unfortunately, doesn't seem that different from most others. It's sad how consistently these stories follow the same script as the wayward wife allows herself to stay mired in the fog regardless of how many loved ones tell them they are acting differently and are not thinking rationally. Affection and adoration are strong drugs and tough to overcome in this situation.
To answer and clarify a few of the additional questions that have been asked...
All three of our kids are in school during the day so my wife does have free time on her hands, unfortunately. She is looking for a job but since she has been at home for the past 15 years, her experience is limited. She was previously an elementary school teacher so she is capable, but the job market is tight, and in my opinion, her mental acuity just isn't what it used to be (stupid wayward wife).
Our children (14, 11, and 6) don't know exactly what is happening, but they know that their mother sleeps on the sofa and isn't always home to put them in bed. Our 14 year old daughter has asked me several times if we were getting a divorce, and I've answered that I don't want that to happen and that her mother and I are working on some issues. The two younger boys are fairly oblivious and don't seem too concerned at all yet. They are all my biggest concern through all this though. She believes that the kids are young and resilient so while they may have an adjustment period, they'll be fine in the long run. She may be right, but I know that if we can develop a happy relationship together again, the kids would be even better.
I've been instructed by my attorney to not move money around at this point so if this does head towards divorce, her attorney won't be able to say I hid or redistributed money. That would make me look like I was trying to deceive her and the courts don't look favorably on that. My attorney suggests staying on the up and up, as this will give me a significant advantage especially given her continued unacceptable activities, which I log daily... it's a horrible list to review. That should give me an advantage when it comes to maintaining the house and more than 50% custody, if divorce is the path we take. I've filled out most of the legal paperwork as a precaution and to be prepared in case she actually does file herself, but I still consider that an absolute last resort.
I don't recall who mentioned it, but my crazed wife definitely feels that her loved ones (and me) telling her she is making a huge mistake only drives her closer to the other guy. He understands her. Yada, yada, yada. Since he is the only one telling her this a great choice, she eats up every word he says. It's such a fantasy world, I don't know how she doesn't recognize that.
I do agree and truly believe that at some point, she's going to realize her selfish choices have hurt more than just me (our kids, our families, our friends) and she'll come around, but I don't know how much longer I can withstand the torture her continued betrayal and vicious comments cause. This fog is such a powerful force and I can't figure out how to make her hit rock bottom if she refuses to move out of the house (guess we're both stubborn with that). She has her cake and she's eating it too. I realize that. I just don't want to leave the house that I've shared and maintained with her and the kids for the past 17 years, and per both our lawyers, we're both entitled to stay.
I'm going to do my best to hold out a little while longer, if at all possible, but I struggle so much when I know she is leaving to see him or when she doesn't come home from shopping for several hours and I know she's been with him somewhere. I'm really interested in knowing if anyone has any strategies or thoughts on what to say to her as she's leaving or when she returns from these escapades. I want her to feel guilty and remorseful for leaving both me and the kids for very selfish reasons, but she never seems to feel even a flicker of guilt.
Above all, I am a businessman, so I'll be blunt. Your attorney is directing you only in one direction, and that is divorce. I don't understand why your replies indicate that you want to save this marriage, then. If you want to save it, it just doesn't seem like the divorce path makes sense.
I'll add that the other business people reading this will agree that I'm somewhat butchering the westinghouse studies we all covered in our business training, but I'm trying to make a point. Hope it helps.
First, your wife has no source of income other than you. It sounds like a nice standard of living. So, she is very far away from our most primal "needs". Needs drive us in very practical ways. "Wants" is the zone that she is flourishing in right now. There is very little motivation for change for your marriage security in the 'wants' zone. Sorry, but its true. People on this site call it cake eating. You are meeting her needs, and there is no apparent risk of this ending, based on your behavior. Why in the world would she 'want' anything to change? She's got to 'need' the situation to change before it will change.
Cut off her access to your money, and you've just dropped her into an ice water bath of primal 'needs'. If you want to make the divorce attorney happy, keep a spreadsheet of every dollar transaction you make. Print out statements of your accounts. Tell her that she can have cash money for a very specific list of bread, beef, potatoes, clothes or whatever the kids need. Its preferable if you just buy this yourself, and cut her off. You'll add enough gas to her car to get them to school, but no more. Her gravy train is over.
As a child, I was very poor. Its incredible how we get such clarity of thoughts when we enter the 'need' zone. What choices are open to her now? If she wants to declare it to be unfair, she can ask for a divorce ... wait ... don't those cost money?
I'm really not advocating making her do without her basic needs, like food and clothes. Just making a point that it takes a bleak picture to change a person's thinking. She doesn't have to take the kids to practice. Doesn't have to go shopping, or have cable TV, or access to the internet. She doesn't have to have a cell phone. These are not needs, and there are plenty of short term sacrifices you can make to try to save the marriage.