I would like to say welcome, I am relatively new here myself. About a month.

I can identify with your issue though. Read some of my posts. Luckily I have not run into an issue such as yours or I would have reacted very strongly.

I personally think your SD needs counseling. If I figure correctly, she is 14 now? Has there been any trouble at school? If so, they might test her (the school) and put her in special classes for emotionally struggling kids. I would look toward professional help with this. That is abuse in the very rawest sense of the word. If she were older, you could press charges against her. I would bet your DH would take notice then. It would not be easy, but effective.

I live with a child that is hardly disciplined as well, one of 4. BF has no trouble stating what he punished my oldest for while I was at work. He usually just sends her to her room. His daughter though.... makes me mad just to think about it!

One thing I would like to suggest though, would it really help her to go to her Mom's. If she is not there now, I would assume it is for some reason. I know that SD10 is better off with us, so I am trying to work through these issues.

good luck!

Immature love says: 'I love you because I need you.' Mature love says 'I need you because I love you.'
Erich Fromm

How much contact/visitation does she have with her mother?

Normal children don't even think to make threats like that. We all want to believe "she wouldn't really..." Do you think any of that parents whose kids killed them thought they would? You have to keep YOUR children safe. I personally think leaving in this situation is the only way to for sure do that, but maybe there is another idea. I think she needs more counseling, and I think you do as well. You need someone to help you figure out how to deal with this, and figure out how serious it is and the steps you need to take to protect your children.

"How people treat you is their karma; how you react is yours" Wayne Dyer

No one listens to me on this but I say forget counseling. I'd scare the shit out of her. I'd bring over a nun from a all girls live in Catholic school. Get some brochures from a military academy. Don't pack up your babies, pack up his...

I just don't understand why one toxic person gets to hold the whole family hostage. I had a relative that was this way and life was miserable until he left.

As for the violence, I'd corner her and have a little chat about that. She has no right picking on a little bity person. She how she likes it.

"Courage is fear holding on a minute longer." General George S. Patton

I nipped this problem in the butt last year. My sd 13 slapped my son out and i told off her father right there and then. told him i would call the police, have her taken out of the home, placed in a psych ward for evaluation and If it happened a second time , than he would have to stay in a hotel to visit her and that she would never be allowed in my home ever again.
WAs it extreme? Yes. But i didn't carry him for 9 months so his sister beats the crap out of him and i'll be damned as a mother to stand by and watch my son to be physically hurt by another. If it ended my marriage then so be it. And i warned him he woudl have to come to my place for visitation and that my son would never be out of site , so long he is with company of his daughter.
Well, his daughter didn't come for a few months and then showed up, apologized to her dad and never his her brother again.
when the incident happened i did tell her off as well. i told her she was not the boss under this rough, i couldn't care less what she does at her mom's house because her mothers rules do not apply under mine. Me and my husband call the shots and that is that. then i told off my husband.

These kids have problem and they lose control. You have to be strict to set the boundaries. Unfortunately, in have custody of your sd. I did't. So my situation was very easy to control and to block her away to protect my son.
You're daughter has been in couciling, But i think you should have a family sit down and tell her directly to NEVER touch her brother like that ever again. Speak to your son, so that if she ever says anything or does anything again from this day forth, you will have to take drastic measures. Meaning, seriously tell your dh and sd to leave or arrange another living condition for her.
Our neighbour had her own daughter removed at 14 years old for sex drugs, etc...because it affected the wellbeing of the other 3 kids in the household.The police removed her and brought her to live in a home. You have to pay for this of course but for the safely of your son, if it comes down to that, then i'm sorry for your Sd but that will be the next step if i were in your shoes.
She has counciling, and if nothing is helping her then she needs more help.

Dont be afraid to tell her off. I told my sd off and then i told my husband off in the kitchen, and sd was hearing all this. She was afraid. She never hit my son ever again. She has once told him to shut up, and i told her off in the car for that too and so did her dad.

A little taste of her own medicine. If DH won't do it, then you do it. That is your house and YOUR CHILD. You have every right to protect your family. Grounding and "time-out" is a big, fat joke. I would slap the taste out of her mouth. Maybe she would learn a lesson.

Love

I would definitely at least threaten this kid, that you will do to her what she has done to BS or worse, if she EVER dares do anything to him again. A mother protecting her child is like a bulldog and she would have to be crazy to mess with that!
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Age cannot wither her, nor custom stale
Her infinite variety.

William Shakespeare, "Antony and Cleopatra", Act 2 scene 2

my sd has been physically abusive to my bd the last three years. i say 'abusive' because sd is 8yrs older and should know better, her intentions are to hurt badly, and its WHAT she did.

here is a breakdown of what sd, now 11, has done from the birth of my daughter till just yesterday actually:

stood over her crib with a lit lighter while baby was in it, sleeping.
threw things at the swing while bd was swinging and crying (sd's excuse: 'her crying annoys me').
kicking, tripping, pushing, yanking by the arms, pinching.

just yesterday sd tripped bd3 because bd3 tried to exit sd's room with one of sd's toys. bf and i both saw it. there have been countles times bd3 and sd11 have been playing alone (the next room) togetehr and out of nowhere bd3 cries real hard. sd11 claims she did nothing. bd3 is a tough cookie, she cries only if injured, not if you yell at her or take something away from her.

my advice....please dont leave your sd alone with any child. and please convince your dh to let sd live with bm full time. or something.