Please know that in your life, the OC is not more important than you or your children. You do not even have to consider the OC in regards to your life and what is best for you. She is not the #1 victim here! You, your children and the OC are the victims. No one is more of a victim than the other. However, in regards to your life, you do not have to consider the OC. That responsibility is up to the OW, her xBH...because he may consider himself the OC's father even if not by blood...and your WH.
You get to decide if you want the OC in your life in any way, shape or form. And your children get to decide if they want the OC in their lives in any way, shape or form. The OC's needs and wants do not get to come before yours or your children's!
Please do not let anyone...and I mean anyone here or in your real life...guilt you into thinking you have to put the OC's needs before your own or your children's. First of all, we are not talking about a 2 year old here. We are talking about a grown woman...who really did not consider you or your children's needs before her own. And second, you have zero responsibility to the OC. You children have zero responsibility to the OC. If none of you want her in your lives, then she does not have to be. Your WH can either accept that or not. That's on him!
And please remember as you press forward and process all of this...and I know just how much there is to process and just how overwhelmingly hurt you are as well as your children...your husband nor the OW gave you any thought when they decided to have their affair...and they have not given you nor your children any thought whatsoever when all of this blew up in their faces recently. Protect yourself and your children 100%! Do what is best for you and your children!! Those are the only responsibilities that are yours to own!
And it would be in your best interest to contact a lawyer and find out what you need to do to protect your (marital) assets asap!