As great as TERB is, and I imagine it's pretty wealthy in collective divorce information, consider seeing a counsellor or therapist for yourself. Ideally, try to get her (SO) to agree to come in to see someone with you (couples counselling). Sometimes this is covered under some group benefits plans.
Your GP might be a big help as well. It's worth telling him/her what's going on and how you're feeling if this is affecting your functionality at work (or your sleep patterns).
Assuming you're pretty honest with her about income and assets, and she's not an unfit parent, rushing to lawyer-up may be jumping the gun IMO. Personally, I imagine if it's salvageable, salvaging the marriage is the ideal solution.
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That said, you'll probably want to get some legal advice, regardless. Especially if there are family assets (cottage, inheritance etc.) that are soon to be coming your way. There are tons of books on divorce law in this country. Knowledge is power and it might ease some of your anxieties, at-least as far as the process goes.
My advice would be to remember Newton's Third Law: for every action, there is an equal and opposite reaction. If you get a ball-busting asshole lawyer, so will she. And since you're the only one earning an income, my money would be on you eventually paying her lawyer fees (one way or another).
In my experience, the only one that "wins" in this situation are the lawyers. If the marriage is truly unsalvageable, the less acrimonious this process is, I imagine the better it'll be for you both.
I strongly recommend "Collaborative Practice" lawyers. Essentially, these are lawyers trained in (and agreeable to) mediation. Look up OCLF for more information.
If you're looking to be awarded sole-custody, all of the marital assets and for her to not ever see a dime of spousal support, this is NOT the route for you. But as many have already pointed out, dream on.
If you're hoping to leave with what you're entitled to under the law, and expect she'll get the same, collaborative practice is a pretty good route to get there quickly with a lot less pain than you'll probably give (and get) with ball-busting, letter-writing lawyers.
I think it's been said, but she's legally entitled to half of the value of the growth in combined (family) net-worth between the date your co-habitation period began, and whenever your separation date is. This calculation is black and white and it makes no difference who worked and who didn't. She gets half of the value of your couch, you get half of the value of her car if they were bought after co-habitation began. She gets to keep the box of tampons, but you are owed half of its value.
So, to the 'you being royally fucked' statements, I'd say if you feel that you deserve more than half (in-terms of the division of assets) for any reason, then yes, you're about to get royally fucked.
The spousal support payments and custody arrangements are a whole other thing, and this is where going to the greasiest, ball-busting lawyer(s) you can find might put you at an advantage. But if she happens to react by finding an even greasier, soul-annihilating lawyer, you might get substantively fucked. This would be an unacceptable risk to me, unless you have an ace in the hole.
Let's assume you don't. I'll re-state my suggestion for collaborative practice lawyers. Ease her into the idea (you both have to agree to a CP arrangement), if this is the route for you. Get her to want a fair settlement 'for the good of the kids.'
You'll be dealing with this woman until your kids are 18, and probably for a while after that (post-secondary school, moving back home after post-secondary school, weddings, grandkids etc.) Attempting to screw her over in the separation/divorce isn't a great foundation to build this new relationship on top of.
Good luck!
