OP – if I were the SIL in this scenario, I would resent you, and probably be upset at my wife if she took your side. I also would not take your money, unless I was really desperate.
To correct a couple of things that zahavasdad wrote:
1) it’s certainly not “illegal” to give a gift, even if it will be subject to gift tax. That is like saying that it’s illegal to earn income, because it will be subject to income tax.
2) the gift giver (donor), not the gift recipient (donee) pays gift tax.
3) for a married donor, there is an annual exclusion of $26k, per donee, before the gift tax kicks in. I believe that would allow for a married couple to gift another married couple $52k a year, without any gift/estate tax repercussions. Even after the annual exclusion is exceeded, there is a lifetime unified $5 million gift/estate exclusion, before any gift tax would apply.