So much good advice here I don't think I can add any wisdom, just to say I can't believe how patient you have been already with the massive disruption this has caused to your family life. Given that your FIL is such a bully I think I would have confronted him before now-has no-one ever stood up to him? But of course all the wisdom on here quite rightly points to detachment as the way forward.
Wishing you all the best.