Sorry for your loss.
I had a similar situation 10+ years ago when my parents divorced. it was contentious, and my parents had a lot of animosity to each other. My mom and her family especially to my dad. They split things however they did, I didn't care, but my mom tried to insist that the money my dad used to buy his new house was mine and my sisters. The house was put into mine and my sister's name. When we sold, my mom tried to insist it was ours, but I flipped it around and gave it to my dad, as he had nothing at the time.
My relationship with my mom soured for years after. My thoughts were, was never my money to start, so it was never mine to keep. Time healed all wounds eventually, but it was a strenuous few years after my mom found out I didn't keep "my" half.
What I'm trying to say, is similar to a few other posters here. Your dad left you the money. Full stop. You have the right to do whatever you want with it. Whatever you choose, won't fix underlying problems and issues there seem to be, and is bound to make someone unhappy, regardless of intention. So do what makes you happy, and time will either heal all wounds, or whatever you do with it, will show you your family's true colors. An event like this, also allows you establish boundaries with your family too, which is never a bad thing.
As noted too, if you are married, this decision isn't just yours. You should consult with your wife on what's best for you and her and kids if you have any.
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