Making a big guess from your story, Marien, I would say your father-in-law sexually interfered with your sister-in-law when she was under 15. This would go a long way to explain why she then began a sexual affair with her brother. The ideas of family love & sex would be all mixed up in her childish head. When she grew too old for her father's tastes (
) she must have felt 'jilted' and so looked to replace that kind of love with her brother. Very sad for both of them.
Your ex couldn't help beng messed up by all this. His boundaries and understanding about families & sex must be very, very confused. It's a fair guess that he was able to form a relationship with you because of what happened in your own childhood. Even though you have healthy values, you endured a similar blurring of boundaries. This probably made you more tolerant of attitudes that would have put other women off. That's not to say there's something wrong with you! But that you may have missed some clues about what he's like, thanks to your upbrnging.
If you sometimes feel like blaming yourself - don't. You've been very, very badly let down by your own birth family, your ex and by fate, which made you a young widow and gave you health problems to deal with. I think you're amazing to be making so much of your life, and doing good for others as well :)
Your ex can't help the way he is but I think he's a danger to your children. He's not capable of separating family love from sex. If he must have contact with DD, it should be supervised at all times. No contact would be better imo. I don't know exactly what you should tell her - try to stick to an age-appropriate version of the truth, and answer her questions honestly. Give her more detail as she gets older. It's a horrid thing for a young woman to know about her father, but the most important thing is that she must know you protected her.
I understand how difficult it must be to feel your husband left you for his sister. It's bad enough when there is another woman in the usual way, this must have torn you to pieces! It must be some help, to know, that it's all he could do. No woman can be what his sister was and is to him. (No woman should be, of course, but their parents have done their damage and there's no second chance at childhood.)
Please tell your doctor how much you're suffering. Ask for some antidepressants and insist on a mental health referral. Cry if you feel like it, the doctor only has 10 minutes to assess your state so don't make it difficult for them.
It was brave of you to post this thread :) Keep writing if it helps!
Sorry this is so long. All the best.