Show respect to an elderly woman who had strong enough feelings about you to mention you by name in her will. She was a mature woman who knew what she was doing. Accept her gift with equanimity, and by all means use it to pay down your debts. Debt is a beast which preys on your peace of mind; getting rid of it is a liberating feeling!

My wife was fast friends with an older couple when she was in medical school; she was far from home, and she stayed with them at least one weekend a month, helped them with the house or ran errands, etc. Twenty years later, they still sent each other Christmas cards but otherwise were too far away to have much contact. When the couple died, my wife was sad at their passing, but then was totally floored to find out they had left her over $10,000 in their will! Imagine the pleasure that couple had on contemplating how much their gift would surprise and please someone whom they cared for.

Sometimes it's harder to receive than to give; but you should rise to the challenge. Your ex is no part of this equation.

Helm

It's better to decline the money than take it and give it to your ex. For one thing, Grandma might have divided the money differently if you weren't in the picture. For another, it's a passive-aggressive way of making your ex jump through hoops to get it, and look bad in front of his family. And finally, if you give it to him, and he really is sleazy, he'll probably just blow through it then tell everyone you didn't.