I think half the problem is you're used to living by yourself now you have the MIL and her zoo.
Too bad if one of the cats just happened to run away and then later the other one went out to find it's friend.
Did you bring up the retirement home to her. At least that would make her think this is where she should be.
Tough job my friend but if she's stressing you out then there's no other option. You have to look after yourself first
If the cats are gone that should relieve some stress a lot as the cats have scratched up my furniture and meow at my bed room door at night trying to get in.