Backstory:
My wife and I were agnostic for several years prior to realizing that we were really atheists in denial. My wife's family(Methodists) always knew that we weren't religious but we never had any direct confrontations about our atheism. My mother in law has re-embraced her faith in the last 7 or 8 years and has mentioned to my wife several times that she is disappointed that we don't have the right home atmosphere for our kids (2 boys, now 12 and 16). She even tried to give my wife a bible at one point (in a sudden gesture while she was dropping my wife off in our driveway one night). My wife rebuffed her nicely and sweetly but didn't want to really stand up to her mom.
I love my in laws as in laws, but both of my parents are dead and I don't treat them as replacements- I refer to them by first name, not mom or dad. My mother in law seems afraid to broach the subject with me, maybe because I won't be too concerned with allowing her room to back out of an argument gracefully, with her denial of our atheism intact(like my wife does).
Now, to the point of this,as we realized our skepticism, and Atheism was growing along with our kids, we also realized that the end result we sought for our kids was a set of behaviors, standards and outlook...not a worldview. We value lifelong learning, productiveness,skeptical thinking, safety, optimism,respect and thoughtful appreciation of others. Being nice for no reason whatsoever is good too. There are other benchmarks we have for our kids, but Atheism is NOT one of them. If they choose that, great...if they accomplish to be good,happy people, however, we have done our job...we think anyway...
We answer all of our kids religious questions with our thoughts and sometimes with a disclaimer like "but some people feel otherwise'. I support them being exposed to facets of my in laws faith because I want them to feel that they can choose any worldview that seems right, and not just do what we do...