In-laws give grandma's china as a wedding gift, demand newlyweds return it next year for son's cousin's wedding: 'We gave our old dishes to my husband’s coworker'

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A set of white floral china on a wooden shelf.
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Am I wrong for returning our wedding gift after learning we have to give it away next year?

My husband and I got married two months ago. His parents gave us his grandmother's china, a full set with serving dishes. His mom said Grandma would've wanted us to have it. Nobody mentioned any conditions. We have a small kitchen, so we gave our old dishes to my husband's coworker, who'd just moved into his first apartment and started using the china.
Last weekend my MIL saw the plates out and told me to be careful because my husband's cousin gets married next summer. Apparently we're supposed to give her the entire set and she'll pass it to whoever gets married next. MIL assumed my husband knew because she and her sister had both had it. He says he had no idea. His parents had
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those dishes for most of his childhood. When I said we'd donated our old set, she said we should've checked first. I honestly don't know why we would check whether we could keep a wedding gift.
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She didn't want to do any damage before the next big day.

I offered to return everything now. I don't want to worry about damaging it and then need to buy replacement dishes next year anyway. MIL says I'm rejecting a family tradition because I don't get to own the china. His dad says we should just store it until the cousin wants it but we barely have room for what we use.
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MIL offered to buy us everyday dishes. My husband thinks that's a fair solution. I'd rather return the china and buy our o but maybe I'm being stubborn now.
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The backs of a bride and groom as they walk down a wooded path.

They would be passing around an unappreciated gift.

CoolWhipMonkey Nobody wants that china. Between my mother and two grandmothers I wound up with five sets of delicate, expensive dishes that couldn't even get washed in the dishwasher. I donated every set to local charities. Now my dad is already talking about Mom's Llardro collection and I already dread it.
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utahforever79 Call your husband's cousin and tell her you're sending her the plates now. She needs to store them until her wedding and then gift them to the next person to get married. Talk this out with her, because either she wants nothing to do with this and you get to keep them, or she'll take them and buy your own dishes. Your MIL is nuts.
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SleepyB h12345 It's weird that the "grandmother wanted them to have it"....only to turn around and say it's tradition to pass to each newly married couple. I would be super annoyed to be in this situation. I would pass it off to the cousin now and all future "gifts" from the in-laws would be getting hit with the question, "Is this actually for us to keep or is it temporary?"
via SleepyBh12345

Usually when you give a gift, it is meant to be with the recipient permanently.

KnownBodybuilder4948 In what world is a "wedding gift" just temporary use of objects which must be passed onward sometime in future? That's seriously weird, not equivalent of "free rent for a year living in de d grandmother's really nice house".
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Bet few brides are particularly enamored with receiving her de d grandmother-in-law's old china. set as said "wedding gift". To me it telegraphs: "cheaped-out on adult-child's wedding gift".
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Sweepbye You cant expect someone to follow a family tradition they were never told about you. Your MIL shouldve communicated the expectations upfront.
via Sweepbye

The mother-in-law wanted to be remembered through her regifting.

Aggressive Sport1818 This is old people's way of keeping themselves relevant... passing on their “legacy”... Which becomes a pain the for younguns that don't want this cr p. And I'm and oldie...
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No-Signature-7079 My BF's parents china had gold on it. He thought it would be a great idea to have a dinner party, using the china. Once I found out that it had to be hand washed, I told him to forget it.
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Harry Welsch Reminds me of my little sister's childhood habit of checking things out of the library to give us as Christmas presents. When you'd open a gift from her she'd always say, "It's due back at the library next month." It was cute when she was 7.
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