Martin Ashworth, 48, from Garforth, near Leeds, died from burns shortly after the fire on 29 April 2014.
He had been sectioned after attempting suicide a month earlier as his marriage to Susan Ashworth deteriorated.
He was discharged on 16 April - 13 days before the fire, Wakefield Coroners' Court heard.
At the time of the fire, West Yorkshire Police said the cause was being treated as suspicious, but they were not looking for anyone else in connection with the investigation.
In a statement read to the court, his mother, Barbara Ashworth, said Mr Ashworth had been told by a nurse he was being sent home from the Becklin Centre in Leeds because "they needed beds".
She said she was shocked by the decision as he had been sectioned under the Mental Health Act for 28 days on 25 March 2014.
"I cannot bring myself to think about the awful events. It's something I will have to carry inside me forever," she added.
More on this and other local stories from across West Yorkshire
The inquest also heard Mr Ashworth was controlling and emotionally abusive towards his 47-year-old wife, who he had known since they were teenagers.
Mrs Ashworth's mother, Ann Cracknell, told the inquest he had "tried to impose control and power over Susan and the boys".
She said: "On Susan's birthday he refused to give her presents from the family, saying she didn't deserve them."
The inquest heard Mrs Ashworth had confided in her mother that she planned to leave him, and had asked for a divorce while he was in hospital.
Mr Ashworth, an IT specialist, was admitted to the Becklin Centre in March 2014 after he tried to poison himself with carbon monoxide fumes in his car.
His wife was only told of his release on the day and the inquest heard she had little choice but to allow him to return to their home in Farfield Court.
The inquest continues.
A man whose wife was found stabbed to death in their burning home had been released from a mental health unit due to a beds shortage, an inquest heard.