Maybe time to start talking about how great and handsome and wonderful your ex is....bet your DH wouldn't love that!  Ugh, men are so stupid. 

Sounds like you have a mini wife on your hands.  Good luck! 

why did they breakup/divorce?

It seems like your DH is living in the past, and cannot value what he has (you) but only what he used to have with his dead ex. He should not be talking to his daughter about private and financial matters. You need to reassert your place as his partner if the relationship is to have a chance, and he needs to acknowledge that you, and not his adult daughter, are his first priority. If he cannot do this I suggest you leave him. 

Yes, it must be a step-hell for you, because you are basically dealing and competing with two other wives with this man.  Counting you, that makes three for him.  First of all, there is his ex-, who supposedly is deceased, but he apparently likes to resurrect her.  Why, I don't know, but via his resurrection, he is holding her up as some sort of competitor for you.  And, then, there is his daughter.  She is also a wife of his, but not in the traditional sense.  She is a wife in the sense that she fulfills many needs in him that a wife ordinarily would, except for the s-e-x part, of course. 

So, he has three women that "fuss" over him and compete.  He set it up that way.  He set it up by treating his daughter more like an equal or wife vs. a daughter.  You are not alone in this.  This is a big problem in step-situations where the roles get all messed up.  My guess is he treats his daughter like a wife, and treats you more like a daughter.  For example, getting upset with you when you don't understand a conversation, something men are more inclined to do with a child vs. a spouse.

This man does not "have a heart of gold" when it comes to his daughter.  What he has is a messed-up woman-child of his own creation that he has set up for a lifetime of failure.  His daughter will go around holding every man up to her father and expecting to get her every whim met or else.  What you have is a man who has no problem pitting his daughter, wife and (dead) ex-wife against each other.  And, I'm sure he feels like PLOM, I'm stuck in the middle.  Boo-hoo.  He is the one who set it up that way and revels in it.  

You and his daughter are not equals, by any means.  There should be no choosing here.  You treat a daughter like a daughter and a wife like a wife.  Hell!  If I ever went to my dad and told him he had to choose between me or mom, he'd laugh in my face!  He'd say, "Go ahead.  Make my day!"  And, that would have instantly put me in my place, as it should be, as his child and not as a competitor for his wife/ my mom.

But what happens is you throw the term SM in there, and suddenly it is far game and competition for all with po' little pops stuck in the middle.  No, pops is not stuck in the middle.  He is the one orchestrating the fiasco.  And, by no means should he be discussing your finances, etc. with his daughter!  This too makes his daughter his wifey-like confidant.  Of course she is going to side with her dad, no matter what, and think of you as the Evil Monster SM Be.atch from Hell.  She thinks you are beating up on her poor ol' dad and that you must be putting mind control dust on his cereal in the am.  

Your DH or dad has no incentive to clean anything up, because he is sitting pretty, with three women (one of whom is deceased) competing over him, God-like him!!  What you have to do is whatever you can to get him to see that unless he starts treating you as a wife, and as his one and only wife, he is going to find himself left with only two wives--his daughter and his dead ex-.  Now maybe that will make him happy, buy I have a feeling it won't.  On the other hand, what do you have to lose by leaving him?  Not a whole heck of a lot.  SS is an adult and can see you on his own.  Seems like he needs someone, a true adult, to care about him, as apparently one hasn't in a long time.  Take care.

Idvilen you said "What he has is a messed-up woman-child of his own creation that he has set up for a lifetime of failure." Wowsers!!!! Sounds like you believe that when this sick dynamic is going on it's for life. You may very well be right and it is very unfortunate. I agree that he the original poster's DH shouldn't be discussing their finances with his daughter. I think that discussing finances with adult kids just creates a messy situation. I noticed around the time my ex was expecting some money, his youngest daughter started calling like I have never seen her calling before. Calling during our dates, while we were having dinner, etc. Pretending like she all of a sudden cared about her father. No all she was doing was trying to make sure she got first dibs on his expected money. Eventually she had a tantrum disrespecting him, verbally abusing him, disrespecting our relationship etc. all because she wanted HIS money. Once he gave her more of it (he had already given her some), she forgot he existed, that was at least until she needed more money. She couldn't visit him, wish him happy holidays, etc. Smh Just a user. Even though at one point he was trying to win me back, I found this message board and learned that HE was really the problem because like Idvilen said he set this sick dynamic up. Needless to say in the end I made it clear the relationship was over for good.