I really don’t follow Dave’s line of reasoning.

The agreement was between the spouses and one of them decided to change it.  She shouldn’t have.

But that isn’t even the central issue.  Family squabbles over money are all too common and to my way of thinking they are tragic.  Does this woman really want to risk estrangement from her husband’s family over a few thousand dollars?

And if she is financially motivated…..the comfortably retired father-in-law is almost certain to pass before she and her husband do.  A sense of entitlement now might hurt the estate settlement later on.

So from either an ethical or a greed point of view, she should do the right thing and sign the check over.