Karen your kind words and advice are very helpful. It is good to talk it out and hear the advice as it comes. You are right I am especially torn because of the effect this has on the kids.
I have left the door open for discussion, and have explained to my kids that she is not well. I leave it up to them as to what communciations they want to have with them. I have spoken with my oldest who will be 14 and let him know that both my sister and my step mom have spoken ill of me to my extended family and that hurts me. I beleive she was looking for approval from them for her actions.
It is an unfortunate situation. I miss my nephew and do feel like I am in mourning. I feel bad for him because I know again due to her illness, she HATES her husbands family, and he loved playing with mine since he doesn't see the other side often.
This has been a bad year for alot of people. Having all this going on makes it worse since you are contantly reminded there is nothing better than spending time with family.
It is up to me to make new traditions I guess.
Big Big Hugs, and Happy Holidays. SUe