My family consists of my wife, my 3 young children, myself, and now my father in law. I've shared the story before, but as a reminder my in-laws moved in with us and my MIL passed away from kidney disease within 6 months. It was traumatic for everyone as she refused to take care of herself and also refused help. My wife still feels guilty for not saving her so she is trying to do it with her dad. We have discussed simple rules like keeping his room clean, not spending money, not eating in his room etc, but he does what he wants. My wife has now assumed her mom's role by not holding him accountable, and doing everything even though he is able bodied. We fight, at times, and I feel powerless because my wife is unwilling to talk about anything related to her dad. As a perfect example of his lack of respect for his daughter and my family, he had secretly decided to marry a woman (less than one year after his wife of 40 years died) and move her in without telling his daughter. He was going to do so in order to help this woman to become a citizen. This brings with it an expectation that my wife and I would be supporting him and this strange woman that he met once. My wife overheard all of this on a phone call, but she won't confront him and continues to make excuses for his behavior. I hate the dysfunction and have lost all compassion for a man that continues to choose himself over my wife and children. How do I keep my marriage as I am losing my ability to tolerate the nonsense. I am beginning to feel that leaving will be better for my children because at least they'll have a normal life half of the time.
In that vein a counselor who can help facilitate you each explain or present it makes a lot of sense and given the heavy difference in your wife's cultural influences coming into play here if you are OK with it and can find someone who is from or has a particular understanding of that, all the better. I admire and have often been jealous of families with such strong cultural roots, yet I also can't imagine some of the treatment (usually women) family members put up with because it's all they know, what they trust. I'm sure the same can be said for members of those cultures looking at my family or cultural base. So just as the right counselor can help your wife explain her gut and you understand (not necessarily agree) her roots they should be able to help you explain your reaction, lack of grasp and needs. I think at least for now focusing on you and your wife educating and opening up to each other but it might help pave the way for your wife to be able to ease her father into a new "reality" or help you and he communicate needs better.
I wonder too if maybe there is more medically/cognitively involved in your FIL's situation and even your wife's response (knowing it or not). They have both suffered a great loss and people deal with loss differently but just because your wife has steeped into her mothers shoes in the car of her father doesn't mean he thinks of her as his wife's replacement. Your wife's care and what seems to you favoring your her father over everyone else may be just as tied up in her grief (and miss-placed guilt) over the loss of her mom too, it wouldn't surprise me if once unpacked her suitcase is heavy with emotional reasons, beyond her awareness, for what is happening now and what she needs most is your love and support (not loosing yourself) to help her navigate through. The same may be true of your FIL, I don't know if there are cultural factors but the loss of his right arm may have him depressed, repressed and looking for a replacement so his daughter doesn't have to take over. If you & wife as a team can get geriatric professionals involved to help and use his desire to move on (with a new wife, if it happens or not) to steer him to decide he wants to move out now that he doesn't need help anymore and is able (wants) to be independent that is a far better scenario from you forcing him or expecting your wife to, better for kids too seeing you help each other through tough times rather than force your way through.
My heart really does go out to each of you and I hope that collectively you will find a way to work through it as a family and maybe understand each other more in the process making that family bond stronger, what a perfect legacy to evolve from your MIL's passing.
Llamalover47