Should I cut off inlaws?

[Patricia]

There is nothing wrong with severing relationships with toxic people. You do what you need to do. Meanwhile, if your husband goes to a function with his family over the years, it's certainly not a good idea to deny the child time with relatives, unless the child emphatically states "I do not want to go!". By denying her right to visit relatives, you're starting out on the wrong foot -- she needs freedom to make decisions.

Also, i wonder how the family could visit in your home, if you sever ties with them? Just curious.

Accept these people for the lunatics they are, and focus on other things. Once you accept the fact they are not going to change, you will stop expecting them to change. It's true.