IHow do I handle a mom who lies to hurt and manipulate others?

Why are you still in contact with her??????? I would further myself from her fast. My husband's mother did the same thing all of his life and he always protected her and stood beside her no matter what she did. Even the physical abuse, 4 years ago she told the entire family (my side also) that he was a wacked out drug abuser and deserved to die alone. He hasn't spoken to her since. Sometimes you just have to cut your losses, it maybe the best for your children.