Our expert says:
Its fair to explain the sound logistic and financial reasons that lie behind your decision, and that you have decided for significant convenience and the benefit of the children, and don't expect her to take it personally. This is one of the reasons why its usually not wise to enter into a business-type relationship with a relative.
I don't think we can tell you which is "best" - in a letgter you can calmly explain your decision without interruption or emotional intrusion from her side ; in person you can explain bits she doesn't seem to understand. Potentially, you can do both - send a letter, and follow it up in person if necessary
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