I think that it would be inconvenient for Michael to have the kids around as they gained in undersranding. His business associates would arouse their suspicion. I also very much doubt that Michael would be celibate - he wouldn't remarry but he would probably have a woman around regularly.

As was pointed out above, Michael probably wanted his children educated away from Nevada. I'll guess that started with some sort of prep school. Also, Michael always wanted a veneer of normalcy, and once it sunk in to the community that Kay was gone he'd start to realize that it looked odd for his kids to be motherless in town, but escorted around by his cronies. Even his divorce would have to be choreographed for appearances.