Preparing a teen for life on their own

[Hula Hoop]

To add to what @Goldielocks said, I had a friend when I was about 19 who had been in foster care.  She was going to college and working part time with a partial scholarship.  She appeared to be all on her own since she didn't have parents but she told me that what had 'saved her' was that one of her previous foster mothers loved her and treated her like a real daughter.  This manifested itself in different small ways but the main thing seemed to be that she behaved like a parent and my friend knew that if she was in a bind, she could always call her.  I remember that the big thing was that she was sleeping on the floor and couldn't afford a bed or mattress and the ex-foster mother heard about this and swooped in and took her bed shopping.

 It was a small thing and not to do with the money but just the fact that someone in the world cared about her and cared that she had to sleep on the floor of her room.  I think she also spent major holidays with the ex foster mother, which is also often a huge problem for former foster children.

[Gay Burqueño Dad]

The only thing I have to add is - I for one would have struggled to parent an older teen at 28,, especially on top of two other kids. Life has handed you a sad situation and I commend you and your wife for helping to heal a portion of your wife's family's dysfunction. We (in a very different situation) adopted a family member who otherwise would have been in foster care. It has turned out well, but it was insanely hard.

The people telling you to take the other two kids have NO business butting in there. I know people who have taken more family-member kids out of foster care than they could deal with and it has not turned out well.

It sounds like "adoption" is not the word for your current arrangement. But despite that, private agencies that work with foster care and adoption could be a good resource for you - for example, to recommend counselors/therapists who have experience with teens who have moved homes (and with their new guardians!).

Last, if the financial or legal aspects are a strain on you either for real or just mentally, you could consider becoming official "foster parents" for your sister-in-law. Most states give a few hundred dollars a month in stipend. I don't know if you have legal guardianship figured out, but if your arrangement is entirely informal currently, you may run into legal issues in the future that a formalized foster care arrangement would head off. Note, the bureaucratic aspect of foster care is a pain and may well not be worth the financial/legal benefits depending on your situation.